Merger and acquisition literature review

Counsel for the buyer will invariably undertake a careful review of the organizational documents and general corporate records including capitalization of the target company, including: Charter documents certificate of incorporation, bylaws, etc. The buyer will want to analyze any potential environmental issues the target company may face, the scope of which will depend on the nature of its business. Where an environmental review is conducted, it will typically include a review of the following:

Merger and acquisition literature review

Cash[ edit ] Payment by cash. Such transactions are usually termed acquisitions rather than mergers because the shareholders of the target company are removed from the picture and the target comes under the indirect control of the bidder's shareholders.

Stock[ edit ] Payment in the form of the acquiring company's stock, issued to the shareholders of the acquired company at a given ratio proportional to the valuation of the latter.

They receive stock in the company that is purchasing the smaller subsidiary. Financing options[ edit ] There are some elements to think about when choosing the form of payment. When submitting an offer, the acquiring firm should consider other potential bidders and think strategically.

The form of payment might be decisive for the seller. With pure cash deals, there is no doubt on the real value of the bid without considering an eventual earnout.

Merger and acquisition literature review

The contingency of the share payment is indeed removed. Thus, a cash offer preempts competitors better than securities. Taxes are a second element to consider and should be evaluated with the counsel of competent tax and accounting advisers.

If the issuance of shares is necessary, shareholders of the acquiring company might prevent such capital increase at the general meeting of shareholders.

Merger and acquisition literature review

The risk is removed with a cash transaction. Then, the balance sheet of the buyer will be modified and the decision maker should take into account the effects on the reported financial results.

On the other hand, in a pure stock for stock transaction financed from the issuance of new sharesthe company might show lower profitability ratios e.

However, economic dilution must prevail towards accounting dilution when making the choice. The form of payment and financing options are tightly linked. If the buyer pays cash, there are three main financing options: There are no major transaction costs.

It consumes financial slack, may decrease debt rating and increase cost of debt. Transaction costs include fees for preparation of a proxy statement, an extraordinary shareholder meeting and registration. If the buyer pays with stock, the financing possibilities are: Issue of stock same effects and transaction costs as described above.Get the latest news and analysis in the stock market today, including national and world stock market news, business news, financial news and more.

Mergers and Acquisitions of Financial Institutions: A Review of the Post Literature Abstract This paper provides a review of the recent financial institution mergers and acquisition (M&A) literature covering over studies.

Several robust themes emerge in the post literature. linking high CEO compensation to merger . JIBS Literature Review that still affects the organisation years and years after the legal acquisition actually takes place. The acquisition process can therefore be defined as starting when the first contact is made between the.

literature review and research methodology 24 Penas, M., Unal, H. () examined the impact of the merger announcements on monthly bond returns of acquiring and target-banks in a sample of 65 bank.

Instructions to Offerors—Commercial Items. As prescribed in (b)(1), insert the following provision. Instructions to Offerors—Commercial Items (Oct ) (a) North American Industry Classification System (NAICS) code and small business size NAICS code and small business size standard for this acquisition appear in Block 10 of the solicitation cover sheet ().

Published: Mon, 08 Jan 1. Introduction: Mergers and Acquisitions refer to buying; selling and combining of different companies that can help a growing company in a given industry grow rapidly without having to create another business entity (Virani, ).

20 Key Due Diligence Activities in an M&A Transaction |