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Mergers and Acquisitions Basics: The Key Steps of Acquisitions, Divestitures, and Investments

Mergers and Acquisitions Basics: The Key Steps of Acquisitions, Divestitures, and Investments

ISBN: 978-0-471-67518-1

Jul 2005

320 pages


This book will provide the answers to the questions that senior level executives have about what are M&As and the steps involved. It provides basic guidelines and lessons for going through an M&A for the first time. It explains what the key events, processes, and issues that a buyer or seller must consider during a merger or acquisition. By using this book, executives can avoid costs and sometimes fatal mistakes and maximize the financial and operational value of the deal to their companies. Chapters include: (1) Terms and Phrases: Language of the Deal, (2) Explanation of Legal Structures and Terms, (3) Strategic Transactions: Before the Deal Starts, (4) Mergers and Acquisitions: Doing the Deal, (5) Equity Investments: Doing the Deal, (6) Sellers, (7) Buyers, (8) Appendix: Checklists and Forms, Reports and Presentations, Generic Valuation Exercise


Chapter 1: Introduction.

Chapter 2: The Players.

The Buyer.

The Seller.


Corporate Staff.




Chapter 3: Decision to Buy or Sell.

Reasons to Buy.

Choosing to Sell.

Chapter 4: Buyer’s Preparation for the Deal.

Developing a Strategy.

Building a Capability.

Devising a Process.

Planning the Message.

Chapter 5: Seller’s Preparation for the Deal.

Building a Capability.

Making the Business Most Sellable: Cleaning It Up.

Setting Expectations with Constituents.

Chapter 6: Deal Process.

Determining the Universe of Buyers.

Making the Approach.

One-on-One Negotiation.

Formal Auction.

Informal Auction.

Bankruptcy Auction.

Direct versus Proxy.

Relative Positions of Power.

Chapter 7: Due Diligence.

Building a Team.

What the Buyer Wants to Know.

Chapter 8: Valuation.

Standard Valuation Methods.

Pro Forma: Finding and Splitting the Upside.

Getting the Valuation and Pro Forma Done.

Chapter 9: Integration Planning.

Dedicating Resources.

Linking Due Diligence to Integration Planning and Execution.

Key Integration Issues.

Chapter 10: Financing Issues.

Cost of Capital.

Lost Opportunities.

Financing Contingency: “Bird in the Hand”.

Chapter 11: Closing the Deal and After.

How Is a Deal Closed?

Other Signing and Closing Events.

Postclosing Issues.

Integration and Look Back (the Postmortem).

Appendix A: Standard Form Deliverables During a Strategic Transaction Example.

Appendix B: Due Diligence Report Table of Contents.

Appendix C: Standard Deal Process Checklist Example.

Appendix D: Standard Approval Process Example.

Appendix E: Approval of a Strategic Transaction: Key Topics in Presentation.

Appendix F: Generic Valuation Exercise.

Appendix G: Generic Acquisition Term Sheet for Acquisition by Public Buyer of Privately Held Target.

Appendix H: Generic Investment Term Sheet.


  • Appendix provides student friendly checklists, forms, sample reports and presentations.
  • Explains how M&As work, common mistakes and failures, and why a company should buy or sell.
  • Discusses who the major players are in a transaction and what role they play.