How To Guide For: Understanding Mergers & Acquisitions

Mergers and acquisitions (M&A) refers to the process of buying and selling a company. The difference between mergers and acquisitions is how a deal is presented to manage the public's perception of the transaction. A merger is the combination of two similarly sized companies combined to form a new company. An acquisition occurs when one company purchases another and becomes the new owner. A merger or an acquisition usually starts out with a series of informal discussions between the boards of the companies, followed by formal negotiation, a letter of intent, due diligence, a purchase or merger agreement, and finally, the execution of the deal and the transfer of payment. Mergers and Acquisitions has its advantages and disadvantages. An advantage to a merger and acquisition is that it may have huge financial benefits if the merger and acquisition works out. A disadvantage is if the merger and acquisition doesn't go well it can result in financial losses and a less productive workforce. Another benefit to mergers and acquisitions is that it can help the company tap into new markets. To learn more about mergers and acquisitions click on the pictures below to read the articles.