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M&A 101

By Jeffrey Long

The world of Mergers and Acquisitions for non-Mergers and Acquisitions people.

Jeffrey Long

Jeffrey Long

Southern Region Mergers & Acquisitions Lead
Part One

Example Acquisition Models

There are a plethora of acquisition models. But in general, they can all be classified into four broad categories.

Consolidation

Here the target company is absorbed into the buyer who retains control. All of the buyer’s strategy, structures, processes etc are adopted. This method is seen as the simplest method for achieving aggressive business objectives.

Mixture

Here the new owner picks the best of each entity integrates them into a new entity. This is often the preferred way of optimising the new entity’s operating model and achieving aggressive business benefits.

Transformation

Here the entities synthesise into a new entity entirely. Usually in order to open new client, product or geographic markets or to move away from a brand that was somehow tainted or ‘old-fashioned’.

Preserving the status quo or grouping

Here each business retains its own individual corporate identity. The buyer usually limits its involvement to management control and setting performance targets. Sometimes they will share senior management or directors between the firms. And sometimes they will pool contracts with key suppliers to give economies of scale.

We hope this short course has given you an insight into the varied world of M&A and the main terminologies that are used within that sector.

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