Step by Step Process Overview of M&A Transactions

Mergers and acquisitions involving private and public companies entail a number of key legal, business, human resources, intellectual property, and financial issues. To successfully navigate the sales of companies, it is important to understand the procedural features of such a transaction and take into account possible problems and risks. In this article, we will look at the main points to consider when merging and acquiring businesses.

Mergers and Acquisitions: How to Achieve the Desired Result?

The buyer’s journey through the territory of an M&A deal is usually more complex and varied than the seller’s. The need to evaluate the acquisition object, both each asset individually and the entire business as a whole, and integrate the acquired asset into the existing structure of your own business – all this puts more questions and points in the checklist of the transaction for the buyer than for the seller. Not surprisingly, the price of an error in the M&A transaction process for the buyer is higher.

However, despite the growing dynamics of merger and acquisition processes, there is no clear definition of these concepts, contours of their subject field, or relationship with related concepts in domestic scientific literature and in the legal framework. In view of this, there is an objective need to reveal the economic essence of mergers and acquisitions and to structure the existing approaches to defining these definitions.

The process of mergers and acquisitions became more active more than 100 years ago. Today, international mergers and acquisitions represent one of the main features of the globalization of economic development. Today, such processes are becoming commonplace.

It is important for entrepreneurs to be able to navigate the types of company mergers, identify the main goals pursued by the parties when concluding a merger or takeover agreement, and evaluate the effectiveness of agreements and possible consequences. If the company is threatened with a takeover by another company, it is possible to take timely anti-takeover measures tested in world practice to achieve favorable takeover conditions.

Your Guide on Overviewing the M&A Transactions

Mergers and acquisitions can be characterized as a complex socio-economic and political process that affects the interests of all levels of the national economy. The relevance of merger and acquisition research confirms, on the one hand, the objective expediency of such agreements in the conditions of the formation of the global system of the world economy and, on the other hand, the extremely low efficiency of these processes.

Mergers and acquisitions open up undeniable advantages for businesses in comparison with the range of opportunities for organic development, i.e., within the business itself. The implementation of M&A transactions allows us to:

  • successfully solve the tasks of both expanding activities and improving its efficiency in a relatively short time;
  • contributing to the entry of companies into new markets;
  • strengthening market positions;
  • increasing added value;
  • optimizing and reducing costs;
  • eliminating management inefficiencies;
  • providing access to advanced technologies, efficient investment of free funds, etc.

Obtaining internal approvals, such as resolutions of shareholders or the board of directors of a foreign company, as well as powers of attorney from a foreign company, can also delay the process of carrying out a transaction in conditions where international postal transportation of documents operates in a limited mode. If the parties to the transaction are willing to move quickly, it makes sense to abandon the complex structuring of the transaction and limit the transaction documents to only essential terms for time-saving purposes.