What Are Mergers and Acquisitions (M&A)?
Mergers and acquisitions (M&A) is a general term used to describe the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions.
The term M&A also refers to the desks at financial institutions that deal in such activity.
The terms mergers and acquisitions are often used interchangeably but they differ in meaning.
In an acquisition, one company purchases the other outright.
A merger is the combination of two firms, which subsequently form a new legal entity under the banner of one corporate name.
A company can be objectively valued by studying comparable companies in an industry and using metrics.