M&A development framework

Question 1

Name al the stages of the M&A framework

Answer 1

1. Strategy analysis
2. Target selection
3. Due diligence
4. Negotiation
5. Integration
6. Outomes

Question 2

Key decisions in the strategy analysis

Answer 2

What kind of synergy type are we looking for.
- Internal
- Market power
- Relational
- Network
- non market

Question 3

Key decisions in target selection

Answer 3

Find partners and analyse potential synergies, not only financial
- Strategic fit; augments or complements parent strategy
- Organizational fit; match in administrative practices, cultural practices and personal characteristics

Question 4

Key decisions in due diligence

Answer 4

• asses data of operations strategies, financials assets etc
• identify hidden challenges, uncertainties and issues
• compile and analyse these findings to find synergies

Question 5

In the due diligence there are 3 different valuation methods who lead to different outcomes. Which one?

Answer 5

• asset seeking valuation
• market-based valuation
• cashflow

Question 6

Key decisions in negotiation

Answer 6

getting a fair price
- price analysis
- payment options
- deal attitude

Question 7

Key decisions in Integration

Answer 7

• need for strategic interdependence
• need for organisational autonomy

Question 8

Key decisions in outcomes

Answer 8

there is little to no agreement on how to measure M&A performance because it depends on measurement methodologies, time horizon and level of analysis

Question 9

Different outcomes

Answer 9

• premium
• innovation
• turnover
• divestures
• indirect outcomes (competitor reactions and number of common clients)