Understanding the Mergers and Acquisitions (M&A) Process

Now and then, something truly transformative happens in the business world. It happened in 2014 when Facebook acquired WhatsApp. It happened in 2017 when Amazon acquired Whole Foods Market. And it happened in 2019 when Disney acquired 21st Century Fox. These are high profile examples of mergers and acquisitions (M&A).

In simple terms, M&A is a process that brings together two companies, leading to something newer and possibly greater. But how does it all work? We’ll explain the fundamentals.

A Step-by-Step Guide to Mergers and Acquisitions

The M&A process can be a complex and challenging one, but we have broken it down into four main steps to help you understand the process.

Step 1: Understanding the landscape

M&A can take various forms, including mergers, acquisitions, consolidations, tender offers, and others. Each one has its own nuances and regulatory steps that must be followed to ensure a successful result. Understanding the landscape is a crucial first step in the process.

Step 2: Due diligence

Due diligence is a vital early stage of the M&A process. It involves a comprehensive review of the target company’s financial, legal, operational, and cultural information. Experts in M&A law are crucial during this step to help identify risks and set out negotiation strategies to help ensure a successful deal.

Step 3: Negotiation and structuring

Next comes the negotiation stage. From price considerations to post-closing arrangements, every detail matters. M&A lawyers will create agreements that are designed to protect your interests while helping to ensure a smooth transition once the deal is completed.

Step 4: Closing the deal

The M&A process ends with the finalization of legal documents, securing regulatory approvals and ultimately, the transfer of ownership.

Navigating common challenges during M&S transactions

Businesses can face any number of challenges during the M&A process. From cultural clashes to hurdles during the regulatory stages, these roadblocks have the potential to derail deals. As many as 90% of mergers and acquisitions fail, and some of the main reasons for this include a lack of planning and expertise. This is particularly true for small and mid-sized companies, who need help to dedicate the appropriate resources to M&A deals.

Hire an Experienced M&A Law Firm

One of the simplest ways to overcome these challenges is by hiring an experienced M&A law firm to help guide you through the process and provide sound legal advice. And this is where Bingaman Hess can help. Our experienced team is here to work with you to help you navigate the challenges and complexities of M&A so that you can achieve your goals.

With offices in Wyomissing, Kutztown, Harrisburg and Media, we are able to help clients across a range of counties to turn their business aspirations into reality.

Contact us today for a comprehensive consultation and to begin your M&A journey.