| What are mergers and acquisitions (M&A)? |
| Mergers and acquisitions, abbreviated as M&A, refer to the process of buying, selling, splitting, and merging different companies or similar entities so as to help an enterprise grow and expand rapidly in its domain, industry, or area. |
| How long does M&A take? |
| Successful M&A requires adequate preparation and sufficient time for communication and coordination. Generally, it takes 6 to 12 months from the moment the decision to carry out M&A is made to the completion of M&A, while some cases have even taken several years to complete. |
| How much time does the post-merger integration (PMI) take after an M&A transaction? |
| After the buyer’s and seller’s enterprises merge together, the integration will take 6 months to several years. |
| Can small and medium-sized enterprises also engage in M&A? |
| Yes. Small and medium-sized enterprises can use M&A to solve problems such as succession issues, transforming, and growing. |
| How can a company’s value be determined? |
| There are three common methods for valuing a company: market approach, income approach, and asset approach. |
| What contracts must be signed during M&A? |
| Contracts that may be signed during M&A include the following: M&A advisory agreement, non-disclosure agreement, memorandum of understanding, and definitive agreement. |
| What are the advantages of M&A for buyers? |
| Some examples of the benefits of M&A for buyers may include expanding existing businesses, developing new businesses and diversifying businesses, acquiring competitors, and saving taxes. |
| What are the disadvantages of M&A for buyers? |
| Some examples of the drawbacks of M&A for buyers may include: buyers’ relationship with suppliers, sales partners, and other business partners may change; after the M&A has been carried out, liabilities not listed on the balance sheet may be discovered and cause problems, so the buyer should carefully perform due diligence to avoid financial risk. |
| What are the advantages of M&A for sellers? |
| Some examples of the benefits of M&A for sellers may include: succession problems can be solved, the employment of employees can be maintained, the company can continue operating and expand, the profits of the business owner can be maximized, and personal guarantees can be released. |
| What are the disadvantages of M&A for sellers? |
| Some examples of the drawbacks of M&A for sellers may include being unable to sell the company at the desired price and prompting business partners to terminate contracts. |
| Why have there been more and more mergers and acquisitions in recent years? |
| This is because M&A can realize a company’s vision and has many advantages, especially considering the succession problem small and medium-sized enterprises have been facing and the need for industrial restructuring in recent years. |
