Mergers and Acquisitions – How to Avoid a Bad M&A Deal

Walt Disney Company’s $71.3 billion acquisition of 21st Century Fox in 2019 is among the largest mergers and acquisitions ever. A lot of these huge deals have been praised by the media as successes. However, many M&As are disasters. From overpaying for the deal to strong cultural differences, the reasons for failure are numerous and varied. Our free guide offers insight into how to avoid a negative M&A transaction.

M&A activity slowed during the second quarter of 2022 due to volatility in capital markets. There are indications that the pace could be picked up in the near future for strategic transactions.

When companies consolidate generally, they use two methods that include mergers and acquisitions. A merger is the combination of two businesses to create one entity. An acquisition is the process of buying an entity, whether with cash, stocks, or debt, then folding it into your business operations.

In a buyout, the acquiring company buys all the assets and obligations of its intended target, leaving them with nothing other than cash, and possibly debt. Blackstone’s takeover of Italian infrastructure group Atlantia for $28,6 billion, and Brookfield’s purchase of Deutsche Funkturm tower business for $5 billion are two examples.

US private equity firms are catching up to the trend of buying European assets. Seven of the top ten deals of the past year were made by US PE firms which included the $28.6 billion acquisition of Atlantia by Blackstone and the $28.6 billion takeover of Celgene, a cancer drug company by Bristol-Myers Squibb.

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