Walt Disney Company’s $71.3 billion acquisition of 21st Century Fox in 2019 is one of the largest mergers and acquisitions ever. Many of these huge deals have been praised by media as successes. However many M&As turn out to be disasters. From overpaying to a strong cultural differences, the causes for failure are numerous and diverse. This free guide offers insights into how to avoid a bad M&A transaction.
M&A activity slowed in the second quarter of 2022, due to macroeconomic check my source uncertainties and volatile capital markets. However, there are indications that the pace of strategic transactions may accelerate in the near future.
When companies consolidate in the process, they usually use two processes: mergers and acquisitions. A merger involves the fusion of two companies into a single entity, while an acquisition involves purchasing a company using cash, stock or the assumption of debt, and then folding that company into your own operations.
In a take-over, the purchasing company buys all assets and liabilities of the intended target, leaving them with nothing other than cash, and possibly debt. Blackstone’s purchase of Italian infrastructure group 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 getting caught up with the trend of purchasing European assets. Seven of the top ten deals of the year involved US private equity firms such as Blackstone’s $28,6 billion acquisition of Atlantia and Bristol-Myers Squibb’s $28,6b acquisition of Celgene Cancer Drug Company.