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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 one of the largest mergers and purchases of all time. A lot of these mega-deals have been praised by the media as successes. However there are many M&As end up being disasters. Failures can be caused by a variety of factors, including overpaying or cultural differences. It is important to learn from the mistakes made by others, and our free guide will provide insights into how businesses can avoid a bad M&A deal.

M&A activity slowed down in the second quarter of 2022 due to instability in the macroeconomic environment and volatile capital markets. There are indications that the pace may be picked up in the near future for strategic transactions.

When companies consolidate they use two primary methods that include mergers or acquisitions. A merger is the process of combining two businesses into one entity, while an acquisition involves purchasing one company using cash, shares or the assumption of debt and then integrating the company into your own operations.

In a buyout the acquiring company purchases all the assets and liabilities of the target, leaving them with nothing but cash, or possibly debt. Blackstone’s takeover of Italian infrastructure company Atlantia for $28,6 billion as well as Brookfield’s purchase of Deutsche Funkturm tower business for $5 billion are two examples.

US private equity firms are catching up with the trend of buying European assets. Seven of the top ten deals of the last year involved US PE firms, including the $28.6 billion acquisition of Atlantia by Blackstone and the $28.6 billion acquisition of Celgene’s cancer drug company by Bristol-Myers Squibb.

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