Mergers and Acquisitions

Mergers and acquisitions pages explain how companies buy, combine, defend, separate, or restructure control of businesses.

Start with Transaction Types and Business Combinations for acquisitions, buyouts, mergers, reverse takeovers, SPAC combinations, and integration structures. Use Takeover Bids and Defenses for hostile bids, tender offers, poison pills, white knights, and related defense tactics.

Divestitures, Restructuring, and Turnarounds covers carve-outs, spin-offs, demergers, reorganizations, liquidation, ring-fencing, and turnaround work. Deal Valuation, Consideration, and Financing covers control premiums, exchange ratios, contingent consideration, CVRs, purchase price allocation, and acquisition financing.

Corporate-governance reports, partnership structures, public-company forms, commodity reserve terms, and general shareholder-value theory have been moved or merged into their stronger canonical sections.

In this section

• Deal Valuation, Consideration, and Financing
  Acquisition financing, exchange ratio, control premium, contingent consideration, purchase price allocation, CVR, and deal-payment terms.
  • Deal Financing And Consideration
    Corporate finance terms for deal financing and consideration.
    • Acquisition Financing: Funding for Mergers and Acquisitions
      Acquisition financing refers to the methods and tools used to fund the purchase of another company. This comprehensive article explores its historical context, types, key events, models, importance, examples, and more.
    • Contingent Consideration: Payment Contingent on Specific Factors
      An in-depth exploration of Contingent Consideration, particularly in the context of earn-out agreements.
    • Contingent Value Rights (CVRs): Definition, Types, Risks, and Examples
      A detailed exploration of Contingent Value Rights (CVRs), encompassing their definition, types, associated risks, and practical examples to illustrate their use in corporate finance and mergers & acquisitions.
    • Deferred Consideration Agreement: Payment Delayed until a Future Date or Event
      A Deferred Consideration Agreement is a contract where the payment for a transaction is postponed to a future date or upon the occurrence of a specific event.
    • Exchange Ratio: Understanding and Calculating the Number of New Shares in Mergers and Acquisitions
      A comprehensive guide to understanding and calculating the exchange ratio, the number of new shares issued to existing shareholders in mergers and acquisitions.
    • Lump-Sum Purchase: Acquisition of Multiple Assets for One Price
      A lump-sum purchase is the acquisition of two or more assets for a single price. This article explains the allocation of the acquisition price based on the relative fair market values of the assets.
    • Vendor Placing: A Strategic Means of Acquisition
      An insightful look into vendor placing, its historical context, mechanisms, and significance in corporate acquisitions.
  • Deal Valuation And Purchase Accounting
    Corporate finance terms for deal valuation and purchase accounting.
    • Control Premium: Understanding Its Significance in Business Valuation
      A comprehensive explanation of control premium, its implications in business valuation, examples, historical context, comparisons with minority discount, and more.
    • Leveraged Buyout: A Strategic Acquisition Approach
      A detailed overview of Leveraged Buyout (LBO), including its history, mechanisms, significance, and related terms in the realm of finance and investments.
    • Post-Acquisition Profits: Understanding Profits After Acquisition
      A comprehensive guide on Post-Acquisition Profits, covering historical context, types, key events, mathematical models, charts, applicability, and more.
    • Purchase Price Allocation: Assigning the Purchase Price to Identifiable Assets and Liabilities
      A detailed explanation of Purchase Price Allocation (PPA) including its historical context, significance in mergers and acquisitions, methodologies, mathematical models, and examples.
• Divestitures, Restructuring, and Turnarounds
  Divestiture, carve-out, spin-off, demerger, liquidation, reorganization, ring-fencing, and turnaround terms.
  • Divestitures Spin Offs And Carve Outs
    Corporate finance terms for divestitures spin offs and carve outs.
    • Carve-Out: A Comprehensive Overview
      An in-depth exploration of equity carve-outs, a form of corporate restructuring involving the partial IPO of a subsidiary.
    • Demerger: Business Strategy and Its Implications
      An in-depth exploration of demergers, a business strategy where a company splits into separate independent entities. This article covers its historical context, types, key events, mathematical models, importance, and examples.
    • Divestiture: Definition, Methods, Examples, and Strategic Reasons
      A thorough exploration of divestiture, including its definition, various methods, real-world examples, and strategic reasons for divesting business units.
    • Spin-off vs. Split-up: Corporate Restructuring Explained
      Explore the differences between corporate spin-offs and split-ups, two common forms of restructuring that create new independent entities from existing company assets.
    • Spin-Off: Corporate Restructuring for Focus and Efficiency
      A comprehensive look at spin-offs, a corporate restructuring technique where a parent company divests a subsidiary, making it an independent entity to increase shareholder value and operational focus.
    • Spin-Out: A Type of Corporate Restructuring
      A Spin-Out is a corporate action where a company creates a new independent entity by separating part of its operations or assets into the newly formed company.
    • Unbundling: Separation of Business and Securities
      Unbundling involves the separation of a business into its constituent parts or the selling off of separate parts of a security.
  • Restructuring Liquidation And Turnarounds
    Corporate finance terms for restructuring liquidation and turnarounds.
    • Liquidation, Exit, and Ring-Fencing
      Corporate exit and liquidation terms for wind-downs, ring-fencing, and strategic exits.
      • Complete Liquidation: A Series of Distributions in Redemption of All the Stock of a Corporation under a Plan
        An in-depth look at complete liquidation, its process, legal implications, and related considerations in the context of corporate finance.
      • Exit Strategy: Comprehensive Definition for Investments and Businesses
        A thorough exploration of exit strategies in investments and businesses, including types, examples, historical context, and best practices.
      • Liquidation Procedure: Shareholder Surrender and Remaining Asset Distribution
        An in-depth examination of the liquidation procedure whereby shareholders surrender their shares and receive pro rata shares of remaining assets and accumulated earnings.
      • Ring-Fencing: Isolating Assets or Operations Within a Single Entity
        A comprehensive analysis of ring-fencing, its historical context, categories, key events, detailed explanations, mathematical models, charts, importance, applicability, examples, related terms, comparisons, interesting facts, quotes, proverbs, jargon, FAQs, and more.
    • Restructurings, Reorganizations, and Turnarounds
      Corporate restructuring terms for reorganizations and turnaround-management situations.
      • Corporate Reorganization: Definition, Types, and Objectives
        An in-depth exploration of corporate reorganization, including its definition, types, objectives, and practical considerations for restoring a troubled company's profitability.
      • Corporate Restructuring: Reorganizing for Efficiency and Profitability
        Corporate restructuring is the process of reorganizing the structure, operations, or finances of a company for increased efficiency and profitability. It involves major changes in the company's structure to optimize its operations and financial health.
      • G-Type Reorganization: Asset Transfer in Bankruptcy
        A comprehensive guide to understanding G-Type Reorganization, a mechanism involving the transfer of a corporation's assets in bankruptcy to another corporation with tax-free or partially tax-free distribution of stocks or securities to shareholders.
      • Turnaround Management: Strategies to Revive Financially Distressed Companies
        Turnaround Management involves strategies and actions employed to revive companies experiencing financial distress, often requiring the involvement of external stakeholders.
• Takeover Bids and Defenses
  Hostile takeover, tender offer, poison pill, white knight, bear hug, and anti-takeover defense terms.
  • Breakups Raiders And Takeover Rules
    Corporate finance terms for breakups raiders and takeover rules.
    • Asset Stripping: Corporate Takeover Strategy
      The acquisition of a company whose shares are valued below their asset value and the subsequent sale of the company's assets for profit.
    • Bust-up Acquisition: Corporate Acquisitions
      A bust-up acquisition is a type of corporate acquisition where a raider sells some of the acquired company's assets to finance the leveraged acquisition.
    • City Code on Takeovers and Mergers: Comprehensive Guide to Corporate Governance in Mergers and Acquisitions
      A detailed guide to the City Code on Takeovers and Mergers, its historical context, key provisions, importance, applicability, examples, and considerations in company takeovers and mergers.
    • Concert Party: Coordinated Investment Actions
      An overview of the concept of concert parties in financial markets, particularly in stock exchange transactions, and their implications.
  • Takeover Bids And Acquirers
    Corporate finance terms for takeover bids and acquirers.
    • Takeover Actors and Knights
      Corporate raider, black knight, grey knight, and white knight terms used in takeover contests.
      • Black Knight: Unwelcome Takeover Bids in Corporate Finance
        An in-depth look at the concept of a Black Knight in the realm of corporate finance, its historical context, key characteristics, and differences compared to grey knight and white knight.
      • Corporate Raider: Investor Conducting Hostile Takeovers for Profit
        An investor known for conducting hostile takeovers to gain control and profit from selling off a company\\u2019s assets.
      • Grey Knight: Ambiguous Intervener in Corporate Takeovers
        A 'Grey Knight' in corporate takeovers refers to a counterbidder whose ultimate intentions are undeclared, presenting an ambiguous and potentially unwelcome presence to both the target company and the original bidders.
      • White Knight: Strategic Corporate Rescuer
        An in-depth exploration of the White Knight strategy in corporate takeovers, offering historical context, detailed explanations, examples, related terms, and comparisons.
    • Takeover Bids and Offer Types
      Takeover, tender offer, hostile takeover, unsolicited bid, bear hug, and whisper stock terms.
      • Bear Hug: Business Strategy, Advantages, and Disadvantages
        An in-depth exploration of the 'Bear Hug' strategy in business, its implications, benefits, drawbacks, and considerations for shareholders and company boards.
      • Hostile Takeover: Understanding the Mechanisms, Strategies, and Real-World Examples
        A comprehensive guide to the concept of hostile takeovers, detailing the processes, strategies involved, and notable examples in corporate history.
      • Takeover: Definition, Funding Methods, and Notable Examples
        A comprehensive exploration of takeovers, including their definition, various funding methods, and notable examples throughout history.
      • Tender Offer: Comprehensive Definition, Mechanisms, and Examples
        A detailed explanation of tender offers, including their mechanisms, practical examples, and implications for shareholders and corporations.
      • Unsolicited Bid: Definition, Strategies for Avoidance, and Examples
        An in-depth look at unsolicited bids, including their definition, strategies for avoidance, and real-world examples.
      • Whisper Stock: Understanding the Phenomenon and Its Mechanics
        A comprehensive guide to Whisper Stocks: what they are, how rumors of takeover offers affect them, and their implications in the financial markets.
  • Takeover Defenses And Shareholder Rights
    Corporate finance terms for takeover defenses and shareholder rights.
    • Advisers and Deterrence Labels
      Killer bee, shark repellent, and golden parachute terms used in takeover defense discussions.
      • Golden Parachute: Executive Exit Compensation
        An in-depth look at the financial and other benefits provided to senior executives through golden parachute clauses upon their exit, usually triggered by takeover or change of ownership.
      • Killer Bee: An Investment Banker''s Role in Defending Against Takeovers
        An in-depth examination of 'Killer Bees,' the investment bankers who strategize to help businesses resist hostile takeover bids by making the target company less attractive to potential acquirers.
      • Shark Repellent: A Strategy to Defend Against Unwanted Takeovers
        Shark Repellent refers to measures undertaken by a corporation to discourage unwanted takeover attempts. It is a defensive tactic aimed at protecting the company's interests against hostile bids.
    • Board and Asset Defense Tactics
      Staggered board, crown jewels, and Pac-Man defense terms used in takeover defense.
      • Crown Jewels: Key Assets in Corporate Takeovers
        An Overview of Crown Jewels in Corporate Mergers and Acquisitions, focusing on their role as desirable properties whose disposal reduces a company's value and attractiveness as a takeover candidate.
      • Pac-Man Defense: Strategies, Mechanisms, and Examples
        A comprehensive guide to the Pac-Man Defense strategy used by companies to fend off hostile takeovers, including detailed explanations, mechanisms, historical examples, and its effectiveness.
      • Staggered Board: A Defense Mechanism in Corporate Governance
        A staggered board is a corporate governance strategy where board members are elected in increments, complicating quick control takeovers.
    • Poison Pills and Shareholder Rights Plans
      Poison pill, shareholder rights plan, and self-tender offer terms used in takeover defenses.
      • Poison Pill: Defensive Mechanism in Corporate Takeovers
        A tactic employed by companies to discourage unwanted takeover bids by implementing strategies that make the company less attractive to potential acquirers.
      • Self-Tender Offer: A Defensive Corporate Strategy
        An in-depth examination of self-tender offers, a method companies use to buy back their own stock to prevent hostile takeovers.
      • Shareholder Rights Plan: A Defense Mechanism Against Hostile Takeovers
        Detailed exploration of the Shareholder Rights Plan, a specific type of poison pill used to deter hostile takeovers.
• Transaction Types and Business Combinations
  Acquisition, merger, buyout, reverse takeover, SPAC, and integration-structure terms used in corporate control transactions.
  • Acquisitions Buyouts And Spacs
    Corporate finance terms for acquisitions buyouts and spacs.
    • Acquisition Basics and Parties
      Acquisition, acquirer, and asset purchase terms used in corporate transactions.
      • Acquirer: The Entity That Gains Control Over Another in a Business Combination
        An acquirer is a company that gains control over another entity in a business combination, often in mergers and acquisitions, seeking to expand its business, increase market share, or gain new technologies.
      • Acquisition: One Company Taking Over Controlling Interest in Another Company
        An acquisition is a corporate action in which a company buys most, if not all, of another company\\u2019s ownership stakes to assume control of it. This process is also termed a takeover.
      • Asset Purchase: Business Acquisition Strategy
        An asset purchase is a business acquisition strategy where a company buys selected assets of another company, rather than acquiring its stock.
    • Bootstrap and SPAC Acquisitions
      Bootstrap acquisition and SPAC terms used in specialized acquisition structures.
      • Bootstrap Acquisition: Financing Buyouts Using Target Corporation''s Excess Cash
        Bootstrap Acquisition refers to any of several forms of buyout where a buyer finances an acquisition in part with the target corporation's excess cash or liquid assets.
      • Understanding Special Purpose Acquisition Company (SPAC): Key Examples and Risks
        Exploring the intricacies of Special Purpose Acquisition Companies (SPACs), including key examples, inherent risks, historical context, and their impact on modern financial markets.
    • Buyouts and Management Transactions
      Leveraged buyout, management buyout, buy-in, and secondary buyout terms.
      • Buy-In Management Buyout (BIMBO): Definition, Mechanism, and Key Considerations
        A comprehensive guide to Buy-In Management Buyouts (BIMBO), explaining its definition, how it works, key considerations, and its implications in the corporate world.
      • Buy-In: Executive Takeover through Equity Purchase
        Buy-In refers to the acquisition of more than 50% of a company's shares by external executives aiming to gain control and manage the company.
      • Leveraged Buy-Out: High-Risk Investment Strategy
        A leveraged buy-out (LBO) is a financial transaction where a company's equity is acquired primarily through borrowed funds. This strategy is high-risk due to the large proportion of debt financing.
      • Management Buy-Out: A Strategic Acquisition
        An in-depth look into the concept of a Management Buy-Out (MBO), its historical context, key events, different types, detailed explanations, mathematical models, importance, applicability, and examples.
      • Partial Buy-Out: Management Acquisition of Equity
        A comprehensive examination of Partial Buy-Outs, where a management team acquires a portion of the company's equity.
      • Secondary Buyout: Sale of a Portfolio Company from One Private Equity Firm to Another
        Comprehensive coverage of the concept, history, types, key events, and importance of secondary buyouts in private equity.
  • Integration And Reorganization Structures
    Corporate finance terms for integration and reorganization structures.
    • Backward Integration: Strategic Vertical Integration with Suppliers
      An in-depth exploration of backward integration, a type of vertical integration that includes the purchase of, or merger with, suppliers, its benefits, considerations, historical examples, and strategic importance.
    • Horizontal vs. Vertical Integration: Strategic Business Approaches
      Understanding the Differences and Applications of Horizontal and Vertical Integration in Business Strategy
    • Stock-for-Asset Reorganization: Acquiring Assets in Exchange for Voting Stock
      Learn what a stock-for-asset reorganization is, how it differs from a stock purchase, and why structure matters in corporate finance.
    • Stock-for-Stock Reorganization: Corporate Acquisition Strategy
      A stock-for-stock reorganization involves one corporation acquiring at least 80% of another corporation's stock using its own voting stock, creating a subsidiary relationship.
    • Vertical Integration: Comprehensive Guide
      An in-depth exploration of Vertical Integration, including its historical context, types, key events, explanations, models, importance, examples, and related terms.
  • Merger Types And Business Combinations
    Corporate finance terms for merger types and business combinations.
    • Business Combination: Bringing Together Separate Economic Entities
      A comprehensive look at business combinations, including mergers and acquisitions, their historical context, types, importance, and detailed explanations.
    • Concentric Merger: Strategic Business Consolidation
      An in-depth exploration of concentric mergers, their types, significance, and impact on businesses and industries.
    • Conglomerate Merger: Combining Unrelated Business Activities
      A comprehensive guide to understanding conglomerate mergers, where companies with unrelated business activities combine.
    • Horizontal Merger: Definition, Examples, and Comparison to Vertical Mergers
      An in-depth explanation of horizontal mergers, including definitions, examples, and how they differ from vertical mergers.
    • Reverse Takeover: The Strategic Acquisition Method
      A comprehensive guide to reverse takeovers, including historical context, types, key events, explanations, models, importance, applicability, examples, related terms, comparisons, and more.
    • Reverse Triangular Merger: Process, Benefits, and Strategic Implications
      Explore the intricacies of a reverse triangular merger, including its process, key advantages, strategic implications, and real-world applications in corporate acquisitions.
    • Vertical Merger: Definition, Mechanism, Objectives, and Practical Examples
      A comprehensive guide on vertical mergers, explaining their definition, how they work, their primary objectives, and practical examples. Learn about the strategic advantages and implications in the supply chain integration context.