Mergers and Acquisitions – How to Avoid a Bad M&A Deal

The largest mergers and acquisitions of all time include deals like the $71.3 billion acquisition of 21st Century Fox by Walt Disney Company in 2019. These huge deals are often hailed as successes, but the truth is that many M&As are actually disasters. From overpaying to cultural differences, the reasons for failure are numerous and diverse. It’s essential to learn from the mistakes of others. Our free guide will provide an insight into how companies can avoid a disastrous M&A deal.

M&A activity slowed down in the second quarter of 2022 due to macroeconomic uncertainty and volatile capital markets. There are indications that the pace may accelerate for strategic transactions.

When companies consolidate, they typically use two methods which are mergers and acquisitions. A merger involves the fusion of two businesses into one entity, and an acquisition involves buying a company through cash, stock or the assumption of debt and then integrating that company into your own operations.

In a buyout, the buying company purchases all of the assets and liabilities of the intended target, leaving nothing but cash (and possibly debt). Blackstone’s purchase of Italian infrastructure company Atlantia for $28,6 billion and Brookfield’s acquisition of Deutsche Funkturm tower business for $5 billion are two examples.

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