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 purchases ever. Many of these mega-deals are praised by the media as successes. However there are many M&As end up being disasters. From overpaying to cultural differences, the causes for failure are many and diverse. It’s crucial to learn from the mistakes of others, and our free guide offers information on how companies can avoid a bad M&A deal.

M&A activity slowed in the second half of 2022, due to macroeconomic uncertainties and volatile capital markets. However, there are indications that the pace of strategic transactions could get back to normal soon.

When companies merge, they use two main processes that include mergers or acquisitions. A merger involves the fusion of two companies into a single entity, while an acquisition involves purchasing a company with cash, stock or the assumption of debt, and then folding that company into your own operations.

In a take-over, the purchasing company acquires all the assets and liabilities of the company of choice, leaving nothing other than cash, or maybe debt. Examples include Blackstone’s $28.6 billion take-private of Italian infrastructure company Atlantia and Brookfield’s $5 billion purchase of Deutsche Funkturm’s tower business.

US private equity firms are getting caught up to the trend of purchasing European assets. Seven of the top ten deals in the past year involved US PE firms which included the $28.6 billion purchase of Atlantia by Blackstone and the $28.6 billion acquisition of Celgene, a cancer drug company by Bristol-Myers Squibb.

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