Mergers and Acquisitions: What they are and how they work

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News about mergers and acquisitions of different companies from different markets and countries always takes over the economics section of the world's main newspapers. However, not everyone knows how this process actually works.

The simple desire to buy or join another business is not enough ― the journey of merging and acquiring a company can be very long (some can last years!) and needs to comply with some current regulations.

In this blog, you will discover details about corporate mergers bahamas phone number list acquisitions, from their concept to their operation, advantages and disadvantages, regulations, impact and recent examples that have occurred in Brazil .

What are Mergers and Acquisitions?
Merger and acquisition , also known as M&A and M&A (acronym for Mergers and Acquisitions , its translation in English) is the term used when companies come together, through merger or purchase, to form new businesses, increase competitiveness and reaffirm their positions on the market.

So, there are indeed differences between mergers and acquisitions ― a merger occurs when two businesses come together to form a new organization, while an acquisition occurs when one company buys another. Both processes are considered corporate transactions , since they alter and reorganize the legal structure of an organization.

A merger or acquisition increases a business's market power, and it expands into new segments that it would not reach with its original product or service.

How the mergers and acquisitions process works
The success of a merger and acquisition operation is directly linked to the strategy developed. An M&A process must be conducted with caution, accompanied by expert analysis and careful assessments.

The stages of mergers and acquisitions are as follows:

Develop an action plan , establishing objectives, identifying viable products and services, identifying threats and success factors, defining those involved and deadlines;
Evaluate the company , such as its financial processes, the benefits and risks of the transaction, sales volume, revenue, costs and balance sheet;
Estimate the company's value (valuation) , using a quantitative model;
Decision making , after mapping the benefits and risks, it is time for executives to make the decision about the merger or acquisition;
Negotiation and structuring , where the parties agree on the price and structure of the process;
Due diligence of the target entity , reviewing and understanding the opportunities and risks of the transaction;
Final adjustments , after positive results from the due diligence process, the contract is signed between the parties and the financial part of the transaction is concluded.