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Mergers and Acquisitions Explained by Sebastian Amieva

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Sebastian Amieva

This document provides an overview of mergers and acquisitions (M&A). It defines M&A as transactions where the ownership of companies or business units are transferred between entities. It describes the differences between asset sales and stock sales, and lists the typical parties involved in an M&A deal, including purchasers, sellers, targets, lawyers, and investment bankers. Finally, it outlines different types of merger structures and notes that the M&A process can take between six months to several years to complete depending on a deal's complexity.

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MERGERS AND ACQUISITIONS EXPLAINED BY SEBASTIAN AMIEVA
What is M&A BASICALLY? In corporate finance, mergers and acquisitions are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities.
Asset Sales VS Stock Sales An asset sale is the purchase of individual assets and liabilities, whereas a stock sale is the purchase of the owner's shares of a corporation. While there are many considerations when negotiating the type of transaction, tax implications and potential liabilities are the primary concerns.
Who's Involved in the M&A Process? 1. PURCHASER 2. SELLER 3. TARGET 4. TARGET BOARD OF DIRECTORS 5. M&A LAWYERS 6. INVESTMENT BANKERS 7. Others. A number of other parties may play a role in an M&A transaction.
Business Appraisers, Accountants & Consultants BUSINESS VALUATION: IN SOME COUNTRIES YOU WILL NEED TO HIRE A CERTIFIED BUSINESS BROKER FOR APPRAISALS OR JUST GET A 即BROKER OPINION OF VALUE即. ACCOUNTANTS: THEY HAVE A VERY IMPORTANT ROLE FOR DUE DILIGENCE PROCESS. CONSULTANTS: SOMETIME IS GREAT TO HAVE A TECHNICAL PERSON TO GET DONE A MARKET REPORT.
THE STRUCTURE OF MERGERS Horizontal merger: Two companies that are in direct competition and share the same product lines and markets. Vertical merger: A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker. Congeneric mergers: Two businesses that serve the same consumer base in different ways, such as a TV manufacturer and a cable company. Market-extension merger: Two companies that sell the same products in different markets. Product-extension merger: Two companies selling different but related products in the same market. Conglomeration: Two companies that have no common business areas.
How Long Does the M&A Process Take? The length of the M&A process can take anywhere from six months to several years, depending on the complexity of the deal. While it can be helpful to draft a timeline and target a closing date for tracking purposes, understand that delays are inevitable, so build in time for change.
WE HOPE YOU ENJOYED THIS INTRODUCTION TO M&A IF YOU WANT TO LEARN HOW TO BUY BUSINESSES VISIT WWW.SEBASTIANAMIEVA.COM

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Mergers and Acquisitions Explained by Sebastian Amieva

  • 2. What is M&A BASICALLY? In corporate finance, mergers and acquisitions are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities.
  • 3. Asset Sales VS Stock Sales An asset sale is the purchase of individual assets and liabilities, whereas a stock sale is the purchase of the owner's shares of a corporation. While there are many considerations when negotiating the type of transaction, tax implications and potential liabilities are the primary concerns.
  • 4. Who's Involved in the M&A Process? 1. PURCHASER 2. SELLER 3. TARGET 4. TARGET BOARD OF DIRECTORS 5. M&A LAWYERS 6. INVESTMENT BANKERS 7. Others. A number of other parties may play a role in an M&A transaction.
  • 5. Business Appraisers, Accountants & Consultants BUSINESS VALUATION: IN SOME COUNTRIES YOU WILL NEED TO HIRE A CERTIFIED BUSINESS BROKER FOR APPRAISALS OR JUST GET A 即BROKER OPINION OF VALUE即. ACCOUNTANTS: THEY HAVE A VERY IMPORTANT ROLE FOR DUE DILIGENCE PROCESS. CONSULTANTS: SOMETIME IS GREAT TO HAVE A TECHNICAL PERSON TO GET DONE A MARKET REPORT.
  • 6. THE STRUCTURE OF MERGERS Horizontal merger: Two companies that are in direct competition and share the same product lines and markets. Vertical merger: A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker. Congeneric mergers: Two businesses that serve the same consumer base in different ways, such as a TV manufacturer and a cable company. Market-extension merger: Two companies that sell the same products in different markets. Product-extension merger: Two companies selling different but related products in the same market. Conglomeration: Two companies that have no common business areas.
  • 7. How Long Does the M&A Process Take? The length of the M&A process can take anywhere from six months to several years, depending on the complexity of the deal. While it can be helpful to draft a timeline and target a closing date for tracking purposes, understand that delays are inevitable, so build in time for change.
  • 8. WE HOPE YOU ENJOYED THIS INTRODUCTION TO M&A IF YOU WANT TO LEARN HOW TO BUY BUSINESSES VISIT WWW.SEBASTIANAMIEVA.COM