Analysis of Merger and Acquisition Process and its Aftermath

This report provides a comprehensive overview of mergers and acquisitions (M&A), delving into the intricacies of the M&A process and its various stages. It starts with an introduction, setting the context for the discussion. The core of the report examines the M&A process, outlining key steps such as acquisition strategy development, target company identification, valuation analysis, negotiations, due diligence, contract finalization, financing strategies, and integration. The report also explores the after-effects of M&A on involved parties, including the acquiring company, target company shareholders, and employees, addressing changes in capital structure, shareholder rights, and potential job-related impacts. The report concludes by summarizing the key aspects of M&A, emphasizing the importance of understanding the process and its implications for successful business outcomes, and also the impacts of M&A on stakeholders.

Valuation investment Decision Making

Table of Contents
Introduction...............................................................................................................................3
Merger and acquisition process............................................................................................3
After effects of merger and acquisition................................................................................5
Conclusion................................................................................................................................6
References...............................................................................................................................7

Introduction
In the business world, there are various concepts which are involved and one
of them is merger and acquisition. This is the concept that will be discussed in this
report. It will be covering the important aspects in relation to the same and in that the
process which is involved in the merger and acquisition will be taken into account.
With this, there will also be coverage of the after-effects of the merger and
acquisition which will be faced by all the parties involved in the process.
Merger and acquisition process
Merger and acquisition is the process in which there is a consolidation of two
or more businesses. There are various transactions that are involved in this and shall
be understood in an appropriate manner (Caiazza & Volpe, 2015). For that, the
process which is involved in the same will have to be identified and there are various
steps which are included in this and are as follows:
Development of acquisition strategy: In this, the acquirer will be evaluating the
purpose of the merger and also the gain which will be made to them will be
analyzed. On the basis of this, the strategy will be set.
M&A search criteria will be set: The criteria will be set with the help of which
the target companies which are involved in the market will be identified. These
various aspects can be considered which involve the profit margin, customer base or
location. All of these factors will be used and the potential target will be determined
with which the process is to be carried.

Beginning of the acquisition planning: All the potential target companies which
are identified will be considered and interaction will be made with them (Trichterborn
et al., 2016). It will help in determining the value which will be offered and also other
information will be gained to select the best from the available options.
Performance of the valuation analysis: For the evaluation of the target
company the additional information will be demanded by the acquirer. With the help
of the data, the performance of the target will be analyzed and it will be identified that
probable acquisition is beneficial or not.
Negotiations: The offer will be presented on the basis of the collected
information and for that valuation models will be used. The negotiation among both
the companies will be made after the presentation of the offer.
Due diligence: Once the acceptance has been made there will be detailed
valuation and examination which will be performed by the acquirer (Weber & Yedidia
Tarba, 2012). In this, all the aspects of the target company will be considered such
as human resources, income, assets, and liabilities.
Purchase and sale contract: The agreement for the purchase and sale will be
made once the satisfaction is done with the diligence process. In this the type of
contract will be identified then all of the important details about the merger will be
incorporated in the contract.
Strategy for financing acquisition: All the financing options will be considered
which are clear once the contract is made. They will be helping in making the
decision in relation to the financing of the acquisition.

Integration and closing: The complete process will be performed by both the
parties in the set and required manner (Gomes et al., 2013). On the undertaking of
all the steps, there will be closing of the deal of acquisition which will be made.
All of these steps will be covered in the completion of the process which is
involved in merger and acquisition. With the help of them, the process will be carried
in a best and effective manner.
After-effects of merger and acquisition
The undertaking of the merger and acquisition will be affecting various
aspects of the involved parties and that will be required to be taken into account
(Parola et al., 2015). The acquiring company will be facing the long term impact due
to the process as there will be several changes that will be made to it. The capital
structure and position of the business will be affected. In the case of the target
company, there will be an opportunity that is available with the shareholders in which
they can ask for the required premium. The payments by the company will be made
either in the form of cash or with their own stock (Shi et al., 2012). If the stock is
issued then the shareholders of the target company will be acquiring the stake of the
company and will become the long term interest holders.
Due to this the position of both the companies will be affected in a great
manner. The rights of the company will be distributed and it is required that balance
shall be created among all the aspects. The capital structure will be altered with this
approach and if payment is made in cash then the liquidity position of the company
will be affected in a great manner. With this process, the employees who are working
in the target company will also be affected. They will now be working under another
employer and the working conditions will change for them. It will be difficult for them

to adapt to the change suddenly and will also be facing the threat of a job (Graebner
et al., 2017). There will be several physical and emotional problems that will be faced
by them and will have to overcome them to sustain in the changing environment.
Conclusion
The report that is presented elucidates about the merger and acquisition. The
meanings of the process and the steps which are involved in this have been
identified. There is a detailed description which is provided in relation to the manner
the process shall be carried and will be made successful. Once the implementation
of the merger and acquisition is made there are various impacts that are faced by the
businesses and all of them have been considered. The manner in which various
involved parties will be affected has been determined and proper information in
relation to the same has been provided.

References
Caiazza, R., & Volpe, T. (2015). M&A process: a literature review and research
agenda. Business Process Management Journal, 21(1), 205-220.
Gomes, E., Angwin, D. N., Weber, Y., & Yedidia Tarba, S. (2013). Critical success
factors through the mergers and acquisitions process: revealing pre‐and post‐
M&A connections for improved performance. Thunderbird international
business review, 55(1), 13-35.
Graebner, M. E., Heimeriks, K. H., Huy, Q. N., & Vaara, E. (2017). The process of
postmerger integration: A review and agenda for future research. Academy of
Management Annals, 11(1), 1-32.
Parola, H. R., Ellis, K. M., & Golden, P. (2015). Performance effects of top
management team gender diversity during the merger and acquisition
process. Management Decision, 53(1), 57-74.
Shi, W., Sun, J., & Prescott, J. E. (2012). A temporal perspective of merger and
acquisition and strategic alliance initiatives: Review and future
direction. Journal of Management, 38(1), 164-209.
Trichterborn, A., Zu Knyphausen‐Aufseß, D., & Schweizer, L. (2016). How to
improve acquisition performance: The role of a dedicated M&A function, M&A
learning process, and M&A capability. Strategic Management Journal, 37(4),
763-773.

Weber, Y., & Yedidia Tarba, S. (2012). Mergers and acquisitions process: The use of
corporate culture analysis. Cross Cultural Management: An International
Journal, 19(3), 288-303.