merger and acquisition case study interview

Hacking the Case Interview

Merger & acquisition (M&A) cases are a common type of case you’ll see in consulting interviews. You are likely to see at least one M&A case in your upcoming interviews, especially at consulting firms that have a large M&A or private equity practice.

These cases are fairly straight forward and predictable, so once you’ve done a few cases, you’ll be able to solve any M&A case.

In this article, we’ll cover:

• Two types of merger & acquisition case interviews
• The five steps to solve any M&A case
• The perfect M&A case interview framework
• Merger & acquisition case interview examples
• Recommended M&A case interview resources

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

Two Types of Merger & Acquisition Case Interviews

A merger is a business transaction that unites two companies into a new and single entity. Typically, the two companies merging are roughly the same size. After the merger, the two companies are no longer separately owned and operated. They are owned by a single entity.

An acquisition is a business transaction in which one company purchases full control of another company. Following the acquisition, the company being purchased will dissolve and cease to exist. The new owner of the company will absorb all of the acquired company’s assets and liabilities.

There are two types of M&A cases you’ll see in consulting case interviews:  

A company acquiring or merging with another company

• A private equity firm acquiring a company, also called a private equity case interview

The first type of M&A case is the most common. A company is deciding whether to acquire or merge with another company.

Example: Walmart is a large retail corporation that operates a chain of supermarkets, department stores, and grocery stores. They are considering acquiring a company that provides an online platform for small businesses to sell their products. Should they make this acquisition?

There are many reasons why a company would want to acquire or merge with another company. In making an acquisition or merger, a company may be trying to:

• Gain access to the other company’s customers
• Gain access to the other company’s distribution channels
• Acquire intellectual property, proprietary technology, or other assets
• Realize cost synergies
• Acquire talent
• Remove a competitor from the market
• Diversify sources of revenue

A private equity firm acquiring a company

The second type of M&A case is a private equity firm deciding whether to acquire a company. This type of M&A case is slightly different from the first type because private equity firms don’t operate like traditional businesses.

Private equity firms are investment management companies that use investor money to acquire companies in the hopes of generating a high return on investment.

After acquiring a company, a private equity firm will try to improve the company’s operations and drive growth. After a number of years, the firm will look to sell the acquired company for a higher price than what it was originally purchased for.

Example: A private equity firm is considering acquiring a national chain of tattoo parlors. Should they make this investment?

There are a few different reasons why a private equity firm would acquire a company. By investing in a company, the private equity firm may be trying to:

• Generate a high return on investment
• Diversify its portfolio of companies to reduce risk
• Realize synergies with other companies that the firm owns

Regardless of which type of M&A case you get, they both can be solved using the same five step approach.

The Five Steps to Solve Any M&A Case Interview

Step One: Understand the reason for the acquisition

The first step to solve any M&A case is to understand the primary reason behind making the acquisition. The three most common reasons are:

• The company wants to generate a high return on investment
• The company wants to acquire intellectual property, proprietary technology, or other assets
• The company wants to realize revenue or cost synergies

Knowing the reason for the acquisition is necessary to have the context to properly assess whether the acquisition should be made.

Step Two: Quantify the specific goal or target

When you understand the reason for the acquisition, identify what the specific goal or target is. Try to use numbers to quantify the metric for success.

For example, if the company wants a high return on investment, what ROI are they targeting? If the company wants to realize revenue synergies, how much of a revenue increase are they expecting?

Depending on the case, some goals or targets may not be quantifiable. For example, if the company is looking to diversify its revenue sources, this is not easily quantifiable.

Step Three: Create a M&A framework and work through the case

With the specific goal or target in mind, structure a framework to help guide you through the case. Your framework should include all of the important areas or questions you need to explore in order to determine whether the company should make the acquisition.

We’ll cover the perfect M&A framework in the next section of the article, but to summarize, there are four major areas in your framework:

Market attractiveness : Is the market that the acquisition target plays in attractive?

Company attractiveness : Is the acquisition target an attractive company?

Synergies : Are there significant revenue and cost synergies that can be realized?

Financial implications : What are the expected financial gains or return on investment from this acquisition?

Step Four: Consider risks OR consider alternative acquisition targets

Your M&A case framework will help you investigate the right things to develop a hypothesis for whether or not the company should make the acquisition.

The next step in completing an M&A case depends on whether you are leaning towards recommending making the acquisition or recommending not making the acquisition.

If you are leaning towards recommending making the acquisition…

Explore the potential risks of the acquisition.

How will the acquisition affect existing customers? Will it be difficult to integrate the two companies? How will competitors react to this acquisition?

If there are significant risks, this may change the recommendation that you have.

If you are leaning towards NOT recommending making the acquisition…

Consider other potential acquisition targets.

Remember that there is always an opportunity cost when a company makes an acquisition. The money spent on making the acquisition could be spent on something else.

Is there another acquisition target that the company should pursue instead? Are there other projects or investments that are better to pursue? These ideas can be included as next steps in your recommendation.

Step Five: Deliver a recommendation and propose next steps

At this point, you will have explored all of the important areas and answered all of the major questions needed to solve the case. Now it is time to put together all of the work that you have done into a recommendation.

Structure your recommendation in the following way so that it is clear and concise:

• State your overall recommendation firmly
• Provide three reasons that support your recommendation
• Propose potential next steps to explore

The Perfect M&A Case Interview Framework

The perfect M&A case framework breaks down the complex question of whether or not the company should make the acquisition into smaller and more manageable questions.

You should always aspire to create a tailored framework that is specific to the case that you are solving. Do not rely on using memorized frameworks because they do not always work given the specific context provided.

For merger and acquisition cases, there are four major areas that are the most important.

1. Market attractiveness

For this area of your framework, the overall question you are trying to answer is whether the market that the acquisition target plays in is attractive. There are a number of different factors to consider when assessing the market attractiveness:  

• What is the market size?
• What is the market growth rate?
• What are average profit margins in the market?
• How available and strong are substitutes?
• How strong is supplier power?
• How strong is buyer power?
• How high are barriers to entry?

2. Company attractiveness

For this area of your framework, the overall question you want to answer is whether the acquisition target is an attractive company. To assess this, you can look at the following questions:

• Is the company profitable?
• How quickly is the company growing?
• Does the company have any competitive advantages?
• Does the company have significant differentiation from competitors?

3. Synergies

For this area of your framework, the overall question you are trying to answer is whether there are significant synergies that can be realized from the acquisition.

There are two types of synergies:

• Revenue synergies
• Cost synergies

Revenue synergies help the company increase revenues. Examples of revenue synergies include accessing new distribution channels, accessing new customer segments, cross-selling products, up-selling products, and bundling products together.

Cost synergies help the company reduce overall costs. Examples of cost synergies include consolidating redundant costs and having increased buyer power.

4. Financial implications

For this area of your framework, the main question you are trying to answer is whether the expected financial gains or return on investment justifies the acquisition price.

To do this, you may need to answer the following questions:  

• Is the acquisition price fair?
• How long will it take to break even on the acquisition price?
• What is the expected increase in annual revenue?
• What are the expected cost savings?
• What is the projected return on investment?

Merger & Acquisition Case Interview Examples

Let’s put our strategy and framework for M&A cases into practice by going through an example.

M&A case example: Your client is the second largest fast food restaurant chain in the United States, specializing in serving burgers and fries. As part of their growth strategy, they are considering acquiring Chicken Express, a fast food chain that specializes in serving chicken sandwiches. You have been hired to advise on whether this acquisition should be made.

To solve this case, we’ll go through the five steps we outlined above.

The case mentions that the acquisition is part of the client’s growth strategy. However, it is unclear what kind of growth the client is pursuing.

Are they looking to grow revenues? Are they looking to grow profits? Are they looking to grow their number of locations? We need to ask a clarifying question to the interviewer to understand the reason behind the potential acquisition.

Question: Why is our client looking to make an acquisition? Are they trying to grow revenues, profits, or something else? 

Answer: The client is looking to grow profits.

Now that we understand why the client is considering acquiring Chicken Express, we need to quantify what the specific goal or target is. Is there a particular profit number that the client is trying to reach?

We’ll need to ask the interviewer another question to identify this.

Question: Is there a specific profit figure that the client is trying to reach within a specified time period?

Answer: The client is trying to increase annual profits by at least $200M by the end of the first year following the acquisition.

With this specific goal in mind, we need to structure a framework to identify all of the important and relevant areas and questions to explore. We can use market attractiveness, company attractiveness, synergies, and financial implications as the four broad areas of our framework.

We’ll need to identify and select the most important questions to answer in each of these areas. One potential framework could look like the following:

Let’s fast forward through this case and say that you have identified the following key takeaways from exploring the various areas in your framework:

• Chicken Express has been growing at 8% per year over the past five years while the fast food industry has been growing at 3% per year
• Among fast food chains, Chicken Express has the highest customer satisfaction score
• Revenue synergies would increase annual profit by $175M. This is driven by leveraging the Chicken Express brand name to increase traffic to existing locations
• Cost synergies would decrease annual costs by $50M due to increased buyer power following the acquisition

At this point, we are leaning towards recommending that our client acquire Chicken Express. To strengthen our hypothesis, we need to explore the potential risks of the acquisition.

Can the two companies be integrated smoothly? Is there a risk of sales cannibalization between the two fast food chains? How will competitors react to this acquisition?

For this case, let’s say that we have investigated these risks and have concluded that none of them pose a significant threat to achieving the client’s goals of increasing annual profit by $200M.

We’ll now synthesize the work we have done so far and provide a clear and concise recommendation. One potential recommendation may look like the following:

I recommend that our client acquires Chicken Express. There are three reasons that support this.

One, Chicken Express is an attractive acquisition target. They are growing significantly faster than the fast food industry average and have the highest customer satisfaction scores among fast food chains.

Two, revenue synergies would increase annual profit by $175M. The client can leverage the brand name of Chicken Express to drive an increase in traffic to existing locations.

Three, cost synergies would decrease annual costs by $50M. This is due to an increase in buyer power following the acquisition.

Therefore, our client will be able to achieve its goal of increasing annual profits by at least $200M. For next steps, I’d like to assess the acquisition price to determine whether it is reasonable and fair.

More M&A case interview practice

Follow along with the video below for another merger and acquisition case interview example.

For more practice, check out our article on 23 MBA consulting casebooks with 700+ free practice cases .

In addition to M&A case interviews, we also have additional step-by-step guides to: profitability case interviews , market entry case interviews , growth strategy case interviews , pricing case interviews , operations case interviews , and marketing case interviews .

Recommended M&A Case Interview Resources

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• Case Interview Coaching : Personalized, one-on-one coaching with former consulting interviewers
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Ace Your M&A Case Study Using These 5 Key Steps

• Last Updated November, 2022

Mergers and acquisitions (M&A) are high-stakes strategic decisions where a firm(s) decides to acquire or merge with another firm. As M&A transactions can have a huge impact on the financials of a business, consulting firms play a pivotal role in helping to identify M&A opportunities and to project the impact of these decisions. 

M&A cases are common case types used in interviews at McKinsey, Bain, BCG, and other top management consulting firms. A typical M&A case study interview would start something like this:

The president of a national drugstore chain is considering acquiring a large, national health insurance provider. The merger would combine one company’s network of pharmacies and pharmacy management business with the health insurance operations of the other, vertically integrating the companies. He would like our help analyzing the potential benefits to customers and shareholders.

M&A cases are easy to tackle once you understand the framework and have practiced good cases. Keep reading for insights to help you ace your next M&A case study interview.

In this article, we’ll discuss:

• Why mergers & acquisitions happen.
• Real-world M&A examples and their implications.
• How to approach an M&A case study interview.
• An end-to-end M&A case study example.

Let’s get started!

Why Do Mergers & Acquisitions Happen?

There are many reasons for corporations to enter M&A transactions. They will vary based on each side of the table. 

For the buyer, the reasons can be:

• Driving revenue growth. As companies mature and their organic revenue growth (i.e., from their own business) slows, M&A becomes a key way to increase market share and enter new markets.
• Strengthening market position. With a larger market share, companies can capture more of an industry’s profits through higher sales volumes and/or greater pricing power, while vertical integration (e.g., buying a supplier) allows for faster responses to changes in customer demand.
• Capturing cost synergies. Large businesses can drive down input costs with scale economics as well as consolidate back-office operations to lower overhead costs. (Example of scale economies: larger corporations can negotiate higher discounts on the products and services they buy. Example of consolidated back-office operations: each organization may have 50 people in their finance department, but the combined organization might only need 70, eliminating 30 salaries.)
• Undertaking PE deals. Private equity firms will buy a majority stake in a company to take control and transform the operations of the business (e.g., bring in new top management or fund growth to increase profitability).
• Accessing new technology and top talent. This is especially common in highly competitive and innovation-driven industries such as technology and biotech. 

For the seller, the reasons can be: 

• Accessing resources. A smaller business can benefit from the capabilities (e.g., product distribution or knowledge) of a larger business in driving growth.
• Gaining needed liquidity. Businesses facing financial difficulties may look for a well-capitalized business to acquire them, alleviating the stress.
• Creating shareholder exit opportunities . This is very common for startups where founders and investors want to liquidate their shares.

There are many other variables in the complex process of merging two companies. That’s why advisors are always needed to help management to make the best long-term decision.

Real-world Merger and Acquisition Examples and Their Implications

Let’s go through a couple recent merger and acquisition examples and briefly explain how they will impact the companies.

Nail the case & fit interview with strategies from former MBB Interviewers that have helped 89.6% of our clients pass the case interview.

KKR Acquisition of Ocean Yield

KKR, one of the largest private equity firms in the world, bought a 60% stake worth over $800 million in Ocean Yield, a Norwegian company operating in the ship leasing industry. KKR is expected to drive revenue growth (e.g., add-on acquisitions) and improve operational efficiency (e.g., reduce costs by moving some business operations to lower-cost countries) by leveraging its capital, network, and expertise. KKR will ultimately seek to profit from this investment by selling Ocean Yield or selling shares through an IPO.

ConocoPhillips Acquisition of Concho Resources

ConocoPhillips, one of the largest oil and gas companies in the world with a current market cap of $150 billion, acquired Concho Resources which also operates in oil and gas exploration and production in North America. The combination of the companies is expected to generate financial and operational benefits such as:

• Provide access to low-cost oil and gas reserves which should improve investment returns.
• Strengthen the balance sheet (cash position) to improve resilience through economic downturns.
• Generate annual cost savings of $500 million.
• Combine know-how and best practices in oil exploration and production operations and improve focus on ESG commitments (environmental, social, and governance).

How to Approach an M&A Case Study Interview

Like any other case interview, you want to spend the first few moments thinking through all the elements of the problem and structuring your approach. Also, there is no one right way to approach an M&A case but it should include the following: 

• Breakdown of value drivers (revenue growth and cost synergies) 
• Understanding of the investment cost
• Understanding of the risks. (For example, if the newly formed company would be too large relative to its industry competitors, regulators might block a merger as anti-competitive.) 

Example issue tree for an M&A case study: 

• Will the deal allow them to expand into new geographies or product categories?
• Will each of the companies be able to cross-sell the others’ products? 
• Will they have more leverage over prices? 
• Will it lower input costs? 
• Decrease overhead costs? 
• How much will the investment cost? 
• Will the value of incremental revenues and/or cost savings generate incremental profit? 
• What is the payback period or IRR (internal rate of return)? 
• What are the regulatory risks that could prevent the transaction from occurring? 
• How will competitors react to the transaction?
• What will be the impact on the morale of the employees? Is the deal going to impact the turnover rate? 

An End-to-end BCG M&A Case Study Example

Case prompt:

Your client is the CEO of a major English soccer team. He’s called you while brimming with excitement after receiving news that Lionel Messi is looking for a new team. Players of Messi’s quality rarely become available and would surely improve any team. However, with COVID-19 restricting budgets, money is tight and the team needs to generate a return. He’d like you to figure out what the right amount of money to offer is.

First, you’ll need to ensure you understand the problem you need to solve in this M&A case by repeating it back to your interviewer. If you need a refresher on the 4 Steps to Solving a Consulting Case Interview , check out our guide.

Second, you’ll outline your approach to the case. Stop reading and consider how you’d structure your analysis of this case. After you outline your approach, read on and see what issues you addressed, and which you didn’t consider. Remember that you want your structure to be MECE and to have a couple of levels in your Issue Tree .

Example M&A Case Study Issue Tree

• Revenue: What are the incremental ticket sales? Jersey sales? TV/ad revenues?
• Costs: What are the acquisition fees and salary costs? 
• How will the competitors respond? Will this start a talent arms race?  
• Will his goal contribution (the core success metric for a soccer forward) stay high?
• Age / Career Arc? – How many more years will he be able to play?
• Will he want to come to this team?
• Are there cheaper alternatives to recruiting Messi?
• Language barriers?
• Injury risk (could increase with age)
• Could he ask to leave our club in a few years?
• Style of play – Will he work well with the rest of the team?

Analysis of an M&A Case Study

After you outline the structure you’ll use to solve this case, your interviewer hands you an exhibit with information on recent transfers of top forwards.

In soccer transfers, the acquiring team must pay the player’s current team a transfer fee. They then negotiate a contract with the player.

From this exhibit, you see that the average transfer fee for forwards is multiple is about $5 million times the player’s goal contributions. You should also note that older players will trade at lower multiples because they will not continue playing for as long. 

Based on this data, you’ll want to ask your interviewer how old Messi is and you’ll find out that he’s 35. We can say that Messi should be trading at 2-3x last season’s goal contributions. Ask for Messi’s goal contribution and will find out that it is 55 goals. We can conclude that Messi should trade at about $140 million. 

Now that you understand the up-front costs of bringing Messi onto the team, you need to analyze the incremental revenue the team will gain.

Calculating Incremental Revenue in an M&A Case Example

In your conversation with your interviewer on the value Messi will bring to the team, you learn the following: 

• The team plays 25 home matches per year, with an average ticket price of $50. The stadium has 60,000 seats and is 83.33% full.
• Each fan typically spends $10 on food and beverages.
• TV rights are assigned based on popularity – the team currently receives $150 million per year in revenue.
• Sponsors currently pay $50 million a year.
• In the past, the team has sold 1 million jerseys for $100 each, but only receives a 25% margin.

Current Revenue Calculation:

• Ticket revenues: 60,000 seats * 83.33% (5/6) fill rate * $50 ticket * 25 games = $62.5 million.
• Food & beverage revenues: 60,000 seats * 83.33% * $10 food and beverage * 25 games = $12.5 million.
• TV, streaming broadcast, and sponsorship revenues: Broadcast ($150 million) + Sponsorship ($50 million) = $200 million.
• Jersey and merchandise revenues: 1 million jerseys * $100 jersey * 25% margin = $25 million.
• Total revenues = $300 million.

You’ll need to ask questions about how acquiring Messi will change the team’s revenues. When you do, you’ll learn the following: 

• Given Messi’s significant commercial draw, the team would expect to sell out every home game, and charge $15 more per ticket.
• Broadcast revenue would increase by 10% and sponsorship would double.
• Last year, Messi had the highest-selling jersey in the world, selling 2 million units. The team expects to sell that many each year of his contract, but it would cannibalize 50% of their current jersey sales. Pricing and margins would remain the same.
• Messi is the second highest-paid player in the world, with a salary of $100 million per year. His agents take a 10% fee annually.

Future Revenue Calculation:

• 60,000 seats * 100% fill rate * $65 ticket * 25 games = $97.5 million.
• 60,000 seats * 100% * $10 food and beverage * 25 games = $15 million.
• Broadcast ($150 million*110% = $165 million) + Sponsorship ($100 million) = $265 million.
• 2 million new jerseys + 1 million old jerseys * (50% cannibalization rate) = 2.5 million total jerseys * $100 * 25% margin = $62.5 million.
• Total revenues = $440 million.

This leads to incremental revenue of $140 million per year. 

• Next, we need to know the incremental annual profits. Messi will have a very high salary which is expected to be $110 million per year. This leads to incremental annual profits of $30 million.
• With an upfront cost of $140 million and incremental annual profits of $30 million, the payback period for acquiring Messi is just under 5 years.

Presenting Your Recommendation in an M&A Case

• Messi will require a transfer fee of approximately $140 million. The breakeven period is a little less than 5 years. 
• There are probably other financial opportunities that would pay back faster, but a player of the quality of Messi will boost the morale of the club and improve the quality of play, which should build the long-term value of the brand.
• Further due diligence on incremental revenue potential.
• Messi’s ability to play at the highest level for more than 5 years.
• Potential for winning additional sponsorship deals.

5 Tips for Solving M&A Case Study Interviews

In this article, we’ve covered:

• The rationale for M&A.
• Recent M&A transactions and their implications.
• The framework for solving M&A case interviews.
• AnM&A case study example.

Still have questions?

If you have more questions about M&A case study interviews, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.

Other people prepping for mergers and acquisition cases found the following pages helpful:

• Our Ultimate Guide to Case Interview Prep
• Types of Case Interviews
• Consulting Case Interview Examples
• Market Entry Case Framework
• Consulting Behavioral Interviews

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M&A case interviews overview

A detailed look at m&a case interviews with a sample approach and example.

M&A motivations | Approaching M&A cases | M&A question bank | Example case walk-through #1 | Example case walk-through #2

Acquisitions are exciting and make for great headlines, but the decision to pursue one is serious business - and makes for a great case interview topic!

For example, consider mega deals like Salesforce acquiring Tableau for $15.7B or Kraft and Heinz merging at a combined valued of $45B. Mergers and acquisitions (often abbreviated as M&A) are some of the splashiest business decisions, often due to the large size of the deals and ability to quickly shake up market share.

Like profitability or market entry cases , M&A questions will often come up during a case interview, either as the primary topic or as a component of a broader case.

Typical motivations for M&A activity (Top)

Before jumping into case interviews, let's talk about why a company might pursue a merger or an acquisition in the first place. There are 3 main factors that drive M&A decisions: growth, competition, and synergies.

M&A for growth purposes

When determining a long-term growth strategy, companies have several options they tend to consider: build, buy, or partner. Amazon's growth into the grocery industry is a great example of a company implementing both build and buy strategies.

Amazon began by leveraging their existing capabilities to build their offering internally, adding food products to their platform and same-day food delivery. However, in 2017 they announced the acquisition of Whole Foods . By purchasing an existing player in the grocery space, they were able to acquire not only the Whole Foods brand, customer base, and retail footprint, but also the employees, supplier relationships, and industry know-how. The acquisition allowed them to grow at a quicker pace than they would have been able to otherwise.

M&A for competitive purposes

Competition can be another big driver behind M&A activity. Consider Uber and Didi's merger in 2016. Both companies were spending enormous amounts of money to gain market share (Uber's losses were estimated at ~$2B), but were still not achieving profitability. By coming to a merger agreement, Uber and Didi were able to end the destructive competition in China and move forward as partners with a shared interest in each other's success.

M&A for synergy gains

Other companies pursue mergers or acquisitions due to the complementary nature of combining two businesses. These complementary aspects are called synergies and might include things like the ability to cut out redundant overhead functions or the ability to cross-sell products to shared customers.

The value of potential synergies is typically estimated prior to doing a deal and would be one of the biggest points of discussion for the buyer. Note that the task of estimating the value of synergies is often more art than science, and many companies overvalue the expected synergies they'll get from a deal. This is just one of the reasons more than 70% of M&A deals fail .

The synergies that can be realized through a merger or acquisition will be different for any given pair of companies and will be one of the primary determining factors in a purchase price. For example, the synergies between a mass retailer buying a smaller clothing company will be much larger than if a restaurant were to buy that same clothing company. Common cost structures and revenue streams often result in greater synergies. For example, two similar businesses that merge will be able to streamline their finance, HR, and legal functions, resulting in a more efficient operation.

M&A framework (Top)

Mergers and acquisitions are not entered into by companies lightly. These are incredibly strategic decisions that are enormously expensive, from both a time and resource perspective, so any leadership team will want to do their due diligence and consider these decisions from multiple angles.

While each M&A scenario will have its own unique factors and considerations, there are some recurring topics you'll most likely want to dive into. We'll cover these in five steps below.

💡 Remember that every case is unique. While these steps can apply to many M&A cases, you should always propose a framework tailored to the specific case question presented!

Step 1: Unpack the motivations

Before recommending a merger or acquisition, the first step is to understand the deeper purpose behind this strategic decision. The motivation might be hinted at in your case prompt, or it might be apparent given general knowledge of a particular industry.

For example, if the question is "Snack Co. is looking to expand into Asia and wants to determine if an acquisition of Candy Co. would be successful", you can tell that the underlying motivation for acquisition is growth through geographic expansion. If the question is about an airline looking to buy another airline, the drivers are likely the competitive nature of the industry and potential synergies in the cost structure.

Once you understand what's driving the M&A desire, you'll know what lens to apply throughout the remainder of the case. You'll also be able to weave in your business acumen in your final recommendation.

Step 2: Evaluate the market

As with many case interviews, a well-rounded market analysis is typically a good place to start. In this scenario, the market we're evaluating is that of the target company. The goal here is to develop a broad understanding of the attractiveness of the market, as the client is essentially investing in this space through M&A activity. For this step, consider:

• Size and forecasted growth of the market
• Barriers to entry such as regulations
• The competitive landscape
• Supplier and buyer dynamics

This step should not be skipped, even in the case of a merger between two companies in the same market. It can't be assumed that the market is attractive just because the buyer is in it already. Rather, if the market evaluation proves unattractive, the buyer should not only avoid the deal, but also address their existing strategy internally.

Step 3: Assess the target company

If the market is deemed to be attractive, the next question is if the target is the optimal company to acquire or merge with in that market. The main points to address here are:

• Is the target financially stable e.g. profitable with growing revenues?
• Does it have a large market share or growing customer base?
• Does it have a capable and experienced team?
• Does it have other intangible assets such as a powerful brand or a valuable patent?

Step 4: Identify potential benefits and risks

Next, consider the pros and cons of doing the deal. Where might the buyer be able to realize synergies with the target? What are the biggest risks to doing the deal? What might derail the integration? For this part, consider these key questions:

• Are there cost or revenue synergies between the two companies?
• What are the primary risks to integrating the two companies?
• Are there concerns around cultural fit (95% of executives say this is vital to a deal's success )?

Step 5: Present your recommendation

Finally, pull all of your findings together and share your final recommendation. Make sure to support your argument with data from the earlier steps and note what you would want to look at if you had more time.

💡 Shameless plug: Our consulting interview prep can help build your skills

M&A question bank (Top)

Below, you'll a see list of M&A case questions sourced from a top candidate - Ana Sousa , an ex-McKinsey Business Analyst currently pursuing her MBA at OSU.

Case A background :

Our client, NewPharma, is a major pharmaceutical company with USD 20 billion in annual revenue. Its corporate headquarters is located in Germany, with sales offices around the world. NewPharma has a long, successful record in researching, developing, and selling “small molecule” drugs. This class represents the majority of drugs today, such as aspirin. They would like to enter a new, fast-growing segment of biological drugs, which are made with large and more complex molecules, and can treat conditions not addressable by conventional drugs. The Research and Development (R&D) associated with biological molecules is completely different from small molecules. In order to acquire these capabilities, a pharma company can build them from scratch, partner with startups, or acquire them. Competition is already many years ahead of NewPharma, so they are looking to jumpstart their own program by acquiring BioAdvance, a leading biologicals startup headquartered in San Francisco. BioAdvance was founded 10 years ago by renowned scientists and now have 200 employees. It is publicly traded, and at current share price, they are worth around USD 2 billion.

Example interview question #1: You are asked to evaluate this potential acquisition and advise on the strategic fit for NewPharma. What would you consider when evaluating whether NewPharma should acquire BioAdvance?

Example interview question #2: let’s explore the setup with bioadvance after a potential acquisition. bioadvance’s existing drug pipeline is relatively limited, however, newpharma is more interested in leveraging bioadvance as a biological research “engine” that, when combined with newpharma’s current r&d assets, would produce a strong drug pipeline over the next 10 years. what are your hypotheses on major risks of integrating the r&d functions of both companies, example interview question #3: in the case of an acquisition, newpharma wants to consolidate all biologicals r&d into one center. there are two options to do so: combine them at newpharma’s headquarters in germany, or at bioadance’s headquarters in san francisco. currently, newpharma does not have any biological facilities or operations in germany, so new ones would need to be built. how would you think about this decision.

Case B background :

Total Energy Inc. (TEI) is a private, medium-sized company with a strong history of drilling and producing natural gas wells in Pennsylvania. They own an ample, and believe valuable, set of land assets where more wells could be drilled. The company is well capitalized but has seen profits decline for the last few years, with a projection of loss for the next year. One of the main drivers is the price of natural gas, which has dropped considerably, mainly because companies like TEI have perfected unconventional drilling techniques, leading to an oversupply of the North American market. Current prices are at a five year low. A larger competition has approached TEI’s leadership about acquiring them for an offer of USD 250 million.

Example interview question #1: TEI’s leadership would like your help in evaluating this offer, as well as identifying alternative strategies. How would you assess this matter?

Example interview question #2: the exploration team at tei has found that there is an oil field in texas that they could acquire, and immediately start drilling. drilling is one of the core competencies and strengths of tei. how would you think about this option in comparison to the selling offer.

Case C background :

Tech Cloud has developed a new research engine designed to increase online retail sales by reshaping customer search results based on real-time customer data analysis. An initial assessment indicates outstanding results in increasing sales, and therefore a tremendous potential for this product. However, Tech Cloud is a small startup, so they do not currently possess the capabilities to sell and install their algorithm in large scale. A major tech company has approached Tech Cloud with a partnership offer: to help them make the new product scalable, offering to pay $150M for it as is, and asking for 50% of profits on all future sales of the new research engine.

Example interview question #1: How would you assess whether Tech Cloud should or should not take this partnership offer?

Example interview question #2: what risks would you outline in this partnership, and how would you recommend tech cloud to mitigate them.

Case D background :

Snack Hack is the fifth largest fast-food chain in the world in number of stores in operation. As most competitors, Snack Hack sells fast-food combo meals for any time of the day. Although Snack Hack owns some of its store, it is mainly operating under a franchising business model, with 85% of its operating stores owned by franchisees. As part of a growth strategy, Snack Hack has been analyzing Creamy Dream as a potential acquisition target. Creamy Dream is a growing ice cream franchise with a global presence. While they also operate by franchising, there is a difference: Snack Hack franchises restaurants (stores), while Creamy Dream franchises areas or regions in which the franchisee is required to open a certain number of stores.

Example interview question #1: What would you explore in order to determine whether Snack Hack should acquire Creamy Dream?

Example interview question #2: what potential synergies can exist between snack hack and creamy dream, example interview question #3: one of the potential synergies that our team believes has great potential is increasing overall profitability by selling creamy dream ice cream at snack hack stores. how would you evaluate the impact of this synergy in profitability, example m&a case #1 (top).

We'll now use our framework to tackle one of the example questions we listed above. Let's focus on Case A and answer the following question:

You are asked to evaluate this potential acquisition and advise on the strategic fit for NewPharma. What would you consider when evaluating whether NewPharma should acquire BioAdvance?

Unpacking: why do they want to acquire.

Following our recommended framework, the first step is to identify the underlying purposes of the acquisition. In this case, you can tell from the context information that their strategic motivation is to enter a new type of drug market. The case has already stated your alternatives outside of this M&A: to build capabilities from scratch or make a partnership/acquisition of a different target.

Evaluating the market: is it an attractive space?

Step 2 in our framework is to evaluate the market. You are told the biological segment is fast-growing, and does not overlap with NewPharma current products, therefore there is no risk of cannibalization. You still need to know who currently competes in this segment, what is the general profitability of these drugs and how it compares to small molecule drugs, and deep dive on the regulation for these drugs, since pharma industry is strongly regulation-driven.

Assessing the target: is it a good company?

Next, we jump into step 3, which is assessing the target. This is where we were given the smallest amount of information, so there is much to cover. R&D is a time-consuming process, and NewPharma will not see profits for drugs they start developing together in case of an acquisition in many years, maybe decades. Therefore, the first thing to look at is the value of BioAdvance’s current drug pipeline, or, in other words, what drugs are they currently developing, their likelihood of success, and their expected revenues and profits.

Another key factor is their capabilities, which is what NewPharma is mostly interested in. What does BioAdvance bring to the table in terms of scientific talent, intellectual property, and research facilities? We also want to look at whether they have current contracts or partnerships with other competitors.

Furthermore, besides their main capability which is research, NewPharma should also learn about their marketing and sales capabilities, to identify any synergies in global sales, and also to understand how they currently promote biologicals, since NewPharma has no experience in this. A great structure would also consider any gaps BioAdvance might have, both in R&D and marketing capabilities. Lastly, NewPharma needs to conduct a due diligence to assess the value of BioAdvance, and therefore the acquisition price.

Identify risks and benefits

Step 4 is identifying the risks and benefits. In a high level, the risks include potential of them having a weak pipeline, which would mean not seeing any profits for years. In addition, NewPharma is a European country, while BioAdvance is from California, which means there is a risk of cultural barriers between both their leaderships and their R&D scientists. In addition, there is the risk that entering this new drug market is not aligned with NewPharma’s strategy or core competencies. The benefits include quickly adding R&D capabilities to catch up with their competitors and addressing a new segment of customers that they currently do not serve.

Example M&A case #2 (Top)

Let's walk through another example M&A case to illustrate how the framework we've introduced might be applied in practice. We'll lay out the thought process a candidate would be expected to demonstrate in a case interview. Here's our prompt:

"Our client, Edu Co., is a publishing company that has historically focused on K-12 curriculum and printed educational materials. They're looking at acquiring a startup that's developed digital classroom materials and assessments. How should they evaluate this opportunity?"

Our first step is to consider why Edu Co. is pursuing an acquisition. From the prompt, we can see that they're an established business looking to acquire a newer entry to the market. Edu Co. has focused on their core capabilities - content and printing - but has not invested in a digital product.

Edu Co. is clearly eyeing the startup target as a way to accelerate their growth into the edtech space. Rather than investing in building a digital product themselves, Edu Co. is looking to buy a company that already has a strong product, customer base, and team.

To begin, we would want to evaluate the digital education market. We might ask for more information on the size and growth rate to start. If we find out the market is large and forecasted to grow at 10% per year, that tells us it's a fairly attractive market.

In terms of barriers to entry, there is limited regulation around K-12 content and assessment. In the edtech space, the main concern is around the secure storage of information having to do with minors.

The competitive landscape is something we would want to ask for more information about. We would want to know how many other companies were pursuing these products and which had the most market share. If the market is highly fragmented, it means there is still room for a clear winner to emerge.

Regarding customer dynamics, we would want to know about any indications of changing preferences. For example, the push towards remote learning during COVID-19 would be relevant, as teachers and students have quickly become more comfortable with digital products.

Once we've determined that the market for digital education is attractive, we'll want to turn our attention to the target company. We would start by asking the interviewer for any information on the company's finances, team, market share, and other assets.

Assume the interviewer gives us revenue, profit, and market share data for the past 3 years. As part of our due diligence, we would want to ensure that all three of these metrics were either stable or growing. If we saw dips in this data, it would be important to dive deeper and understand why their performance had declined.

We would also want to know what their organizational structure looked like. If their staff was primarily sales & marketing (meaning they had outsourced their engineering work), they would be a less attractive target, as acquiring the tech personnel was one of the big reasons Edu Co. was looking to buy the business.

Finally, we would want to understand the technology they had developed. It would be important to understand the strengths and weaknesses of their product as well as any patents or IP.

Next, we would want to lay out any risks or benefits to acquiring the company.

The biggest risk we see is that the two company cultures are very different - Edu Co. is large, slower to make changes, and has an older workforce, whereas the other is much smaller, more agile, and younger. If we tried to integrate these two companies, there may be friction between the two working styles.

On the benefits side, there is potential for both cost and revenue synergies. On the cost side, we would be able to cut redundant administrative roles out, such as HR and finance. On the revenue side, Edu Co. may be able to leverage their customer relationships to cross sell digital products.

Present your final recommendation

Eventually, the interviewer would ask if Edu Co. should pursue the acquisition. Here, we would want to pull all the findings together and lay out our reasoning. Start with the answer first:

Recommendation: "Edu Co. should acquire the edtech startup. It's an attractive market that's growing rapidly and doesn't have a clear leader yet. Furthermore the startup appears to be well-positioned in the market: their revenues, profits, and market share have been growing. As Edu Co. looks to grow into the digital education space, this acquisition will give them a leg-up on competitors. Edu Co. will also be able to leverage their customer relationships to rapidly expand the use of this new digital product. However, Edu Co. will want to develop a robust integration plan to mitigate the risk of culture clash. They may want to consider letting the startup remain in their existing HQ to retain their agile working style."

Summary: putting it all together (Top)

As discussed, M&A cases are fairly common because they have the potential to cover a lot of ground, relevant business challenges.

Realize that in a real M&A case, the due diligence on the target alone could take weeks. It's likely your interviewer will have you dive deeper into one specific step to observe your thought process. In that case, stick with your structure, follow their lead, and always lay out the next steps you would follow if you had more time.

Finally, keep in mind that M&A doesn't just come up because it's fun to analyze; it's also an important source of revenue for the firms - Bain's private equity group does hundreds of due diligence cases annually and BCG's post-merger intergration (PMI) practice makes good money helping firms execute a merger successfully.

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M&a cases, mergers & acquisitions (m&a) are often an answer to broader problems during a case interview.

Merger and acquisition (M&A) cases are fairly common in consulting case interviews , especially for candidates targeting consulting firms with a focus on strategy , corporate finance, or mergers and acquisitions. While they may not make up the majority of cases, they are frequently included to assess your ability to think strategically, analyze financial data, and understand the implications of complex business decisions. 

M&A cases are particularly relevant for consulting roles that involve advising clients on growth strategies , restructuring , or corporate development. Overall, while not every case interview will feature an M&A scenario,we recommend you to be prepared to tackle them effectively as part of your case interview preparation.  

What Are M&A Cases? 

In an M&A case you are typically tasked with assessing the feasibility and implications of potential mergers, acquisitions, or divestitures for a client or company. This often involves analyzing market dynamics, financial statements, competitive landscapes, and strategic synergies to provide recommendations on whether to proceed with a deal and how to optimize its value. Success in M&A cases requires a holistic understanding of business strategy, financial analysis, and industry trends, coupled with strong communication and problem-solving skills.

Moreover, many growth strategy case studies eventually lead to M&A questions. For instance, companies with excess funds, searching for ways to grow quickly might be interested in acquiring upstream or downstream suppliers (vertical integration), direct competitors (horizontal integration), complementary businesses, or even unrelated businesses to diversify their portfolio. The most important requirement for an M&A is that it must increase the shareholders' value , and it must have a cultural fit even when the decision financially makes sense. 

An example prompt for a typical M&A case would be the following: 

"Your client is a mid-sized retail chain considering acquiring a smaller competitor in the same market. They believe this acquisition could expand their market reach and increase profitability. Your task is to evaluate the strategic rationale behind the acquisition, assess the financial implications, and provide recommendations on whether the client should proceed with the deal. What factors would you consider in making your recommendation?"

How Can You Approach an M&A Case – Key Areas to Analyze 

First of all, there is no standard approach or pre-thought out framework you can use for all M&A cases (or cases in general). It is absolutely crucial that you understand the unique situation of your client and develop a customized solution for the task you were assigned. 

To help you with your preparation, we have summarized key areas to analyze in an M&A case. However, it is very unlikely that you will be asked to cover all of them. It is simply too much for a 30-40 minute case interview, so usually the interviewer will put the focus on one or two aspects of the analysis and guide you to dive deeper. 

It is also possible that your M&A case does not resolve the question if a deal should be aimed for or not, but rather focuses on issues in the post merger integration process. Therefore, it is absolutely crucial that you listen carefully during the case prompt, reassure yourself that you understand the problem and objective of the client correctly and adjust your approach accordingly. 

1. Understand your client’s company. 

Before you dive into your M&A analysis, you must understand your client’s company first. In which industry does the client operate? What is the product or service they offer? What are key customer segments and how is the company structured? Does the client possess other businesses that may offer potential for synergies for an M&A deal? 

If you have truly understood your client’s business model, it will come much easier to you to develop a structure for your M&A analysis. Already the question of if you are advising a manufacturer or a service provider, will help you to come up with solid hypotheses on the objectives of the deal. For a service company, access to talent may be an obvious goal for the acquisition while a manufacturer may be more interested in creating cost synergies through vertical integration. But be careful and don’t jump to these kinds of conclusions too easily. You must understand the individual situation of your client in order to give valuable individual advice . 

2. Understand the objectives of the M&A deal.

Begin by clarifying the objectives of the M&A deal. Analogous to making a purchase at a grocery store, M&A can generally be viewed as a " buying decision ". We know that a consumer first determines the "need" to buy a product. There are various objectives that a company may have for pursuing an M&A deal and understanding the strategic rationale behind the acquisition is crucial. Let’s take a look at potential reasons for M&A deals: 

• Strategic acquisitions generally aim at improving the market position and realizing growth opportunities. Entering new geographic markets or industries, diversifying into new product lines, or reaching new customer segments are common ways to broaden market reach and strengthen the market position. 
• Defensive acquisitions , also known as "defensive mergers" or "defensive takeovers," refer to strategic actions taken by a company to proactively protect itself against potential threats or risks. These acquisitions are typically pursued to secure the company's competitive position and reduce specific vulnerabilities. An example for a defensive acquisition would be purchasing or merging with competitors in the industry to consolidate market share and  increase barriers to entry. By eliminating rivals or reducing competitive pressures, the acquiring company can protect its market dominance and pricing power.
• Synergies and value creation are a common reason for M&A deals as well. Combining operations, reducing duplicative functions, and streamlining processes can lead to cost savings and operational efficiencies. This also includes integrating suppliers or distributors into the value chain to improve supply chain efficiency, benefit from economies of scale , and capture additional margins. Additional value may also arise when strong brands are merged and brand relevance in the market is increased. 

Whilst most mergers and acquisitions are evaluated with mid- to long-term objectives, opportunity-driven M&A deals are also an option. If a company is undervalued due to ineffective management or an unfavorable market, it may become an attractive acquisition target for a buyer with the power to bring it back to its potential value. 

It becomes clear that the reasons for M&A deals are diverse and it is impossible to list them all. So, when identifying the objectives of your client, start at a high level, dig deeper when you receive the feedback from your interviewer that you are on the right track and communicate your hypothesis and logical thinking very clearly. 

💡 Prep Tip: When you apply for an M&A consultancy, it is very likely that you will receive an M&A case. As these cases are not as standardized as for example market sizing cases or profitability cases , developing a very good business acumen is even more important. M&A deals are reported regularly in business news, so following these, will help you to develop a better understanding for the reasons behind M&A deals and the challenges that follow. 

3. Analyze the target industry. 

Once it's clear why the client is interested in acquiring a particular company, start by looking at the industry the client wants to buy. This analysis is crucial since the outlook of the industry might overshadow the target's ability to play in it. For instance, small/unprofitable targets in a growing market can be attractive in the same way as great targets can be unattractive in a dying market.

Potential questions to assess are:

• How big is the market?
• What are the market’s growth figures?
• Can the market be segmented, and does the target only play in one of the segments of the market?
• What is the focus? Is it a high volume/low margin or a low volume/high margin market?
• Are there barriers to entry?
• Who are the key competitors in the market?
• How profitable are the competitors?
• What are possible threats?

Porter's Five Forces can be a good starting point for a structured market analysis, but don’t use this framework as it is (and absolutely never mention its name in the interview; just think of what would happen if a company paid McKinsey for a market analysis and the $4,000 daily rate consultant came back with Porter’s Five Forces). Understand the framework as a helpful tool and adjust it to the individual scenario and market conditions your client is facing. 

5. Analyze the target company. 

After analyzing the target industry, understand the target company . Try to determine its strengths and weaknesses (see SWOT analysis ) and perform a financial valuation to determine the attractiveness of the potential target. You are technically calculating the NPV of the company, but this calculation is most likely not going to be asked for in the case interview. However, having the knowledge of when it is used (e.g., financial valuation) is crucial. The following information can be analyzed to determine the target attractiveness: 

• The company’s market share
• The company’s growth figures as compared to that of competitors
• The company’s profitability as compared to that of competitors
• Does the company possess any relevant patents or other useful intangibles?
• Which parts of the company to be acquired can benefit from synergies?
• The company’s key customers
• How much is the target company asking for its purchase price & is it fair (see cost-benefit analysis )? 
• Can the acquiring company afford to pay the valuation? 
• Financial valuation will generally include industry & company analysis. 

6. Analyze the feasibility of the M&A 

Finally, make sure to investigate the feasibility of the acquisition. Take a look at the challenges and risks associated with the deal and get a clearer picture of the concrete conditions for a potential acquisition or merger. 

Important questions here are:

• Is the target open for an acquisition or merger in the first place? If not, can the competition acquire it?
• Are there enough funds available (have a look at the balance sheet or cash flow statement )? Is there a chance of raising funds in the case of insufficient funds through loans etc.?
• Is the client experienced in the integration of acquired companies? Could a merger pose organizational/management problems for the client?
• Are there other risks associated with a merger? (For example, think of political implications and risks of failure, like with the failed merger of Daimler and Chrysler.)

7. Give a recommendation 

At the end of your analysis, give your client a solid recommendation of what to do . Start with your answer first: Should the client acquire the target company or not? Should a merger be pursued or not? Then go on with the reasons behind and structure your recommendation logically. In most cases, three arguments to support your recommendation will be a good number. Prioritize them and communicate them on point. 

But note: Even though you want to give a clear recommendation at the end of your case, answers to M&A questions are usually more complex than a simple “yes” or “no”. If you want to shine in your interview, demonstrate that you are aware of the risks and challenges the decision of your client may entail. Mention them shortly and give an outlook on further analysis you would conduct to confirm your recommendation. 

Key Takeaways – M&A Cases in Consulting Case Interviews 

M&A cases are not the most common ones in consulting case interviews, but nevertheless important to prepare for. There is no standard framework to solve them, but with our top five tips in mind, you will have a good basis for cracking your M&A case.  

• Understand the Strategic Rationale: Clarify the objectives of the acquisition, whether it's for revenue growth, cost synergies, market expansion, talent acquisition, or other strategic reasons. This understanding will guide your analysis and recommendations throughout the case.
• Conduct Comprehensive Analysis: Approach the case with a structured and comprehensive analysis. Gather relevant information by asking relevant questions about market dynamics, competitive landscape, financials, synergies, integration challenges, and potential risks. Frameworks such as a SWOT analysis, Porter's Five Forces , or McKinsey's 7S Framework can help you, but should always be customized to the case at hand. 
• Evaluate Financial Implications : Assess the financial implications of the M&A deal by conducting a detailed financial analysis. Analyze the target company's financial statements, perform valuation techniques (e.g., discounted cash flow analysis), and evaluate key financial metrics (e.g., ROI , NVP, or payback period). Especially if you are applying for financial consulting , consider the impact of financing options, such as debt, equity, or cash, on the deal's financial feasibility.
• Consider Integration Challenges: Address post-merger integration challenges in your analysis. Identify potential integration risks, such as cultural differences, organizational structure alignment, IT systems integration, and employee retention. Note the importance of  a structured integration plan to ensure a smooth transition and maximize synergies between the two organizations.
• Communicate Clearly and Structurally: Present your analysis and recommendations in a clear, structured manner. Use concise and logical reasoning to support your recommendations, and be prepared to defend your approach with thought-through arguments. 

💡 Bonus Tip: Practice makes perfect. M&A cases are complex and not easy to prepare for – especially if you study them by yourself. We recommend connecting with peers and practicing together. Conduct 1:1 mock interviews with other candidates to not only get more confidence in developing individualized and structured case approaches, but also receive feedback on your communication and professional appearance (you can find peers on our Meeting Board ). Especially for M&A cases, it may also be helpful to seek the support of a coach who can help you with finishing touches on your performance. 

You are looking for M&A cases to practice with? 

Check out our recommended resources or browse the Case Library for all cases on this topic. 

👉 Company Case by TKMC: Portfolio optimization of a holding company

👉 Expert Case by Casper: Merger of two beer manufacturers 

👉 PrepLounge Case: Chip equity  

Related Cases

Bain Case: Old Winery

TKMC Case: Portfolio optimization of a holding company

General holding, chip equity, paper print.

Case interview sample question and answer tips – Mergers & Acquisitions

Instead of creating one in-house, we invited Marc Cosentino, the world’s foremost authority on case interviewing, to write a sample case interview question exclusively for MBA Crystal Ball readers.

Marc has twenty seven years of experience with case questions, has written over a 100 cases and trained over 150,000 students and alumni. His authoritative book ‘Case in Point’ was called the MBA Bible by the Wall Street Journal.  

Case interview example with sample questions and answers

How to tackle a mergers & acquisitions case, by marc cosentino.

  While there are a variety of cases an interviewer can give you, one of the most popular is a merger and acquisition case. A case interview example might be:  

Interviewer: Our client company G is a high-end maker/manufacturer of luxury goods. It is unable to keep up with demand for alligator-skin products, hand bags, wallets, belts and briefcases. Not only is it having a hard time getting the alligator, it has seen the price of alligator double in the last nine months squeezing otherwise fat margins. The client is considering buying company H, a Louisiana-based company that sources, tans and processes alligator leather. What do they need to take into consideration?

  The student should first summarize the question, streamline it, not repeat it word for word. The student should also ask a clarifying question or two. One good clarifying question in a M&A case is “Why do they want to buy the company?” Very few students ever ask why.  

Student: Our client, company G, is considering acquiring company H and we’ve been tasked to determine whether this is a good idea. I have a couple of clarifying questions. Why do they want to buy H?

Interviewer: Why do you think?

  It’s not uncommon for the interviewer to throw that questions right back at you – so be prepared. Learn some common reasons why one company might buy another.  

Student: I can think of a number of reasons. Guaranteed uninterrupted source of alligator leather. Reduced alligator costs through lower margins and synergies. Pre-empt the competition from buying H and limiting our source, and maybe to diversify holdings.

  If you memorize reasons to acquire before-hand you won’t have to stop and think about it and you’ll sound confident and professional. I don’t care who is giving the case, McKinsey, Amazon, Pepsi or Bain they all look for the same four things: structure of thought, confidence level, communication skills and creativity.   The most important of the four is structure of thought. Each structure should be crafted to the individual case. Be cautious of books that sell you on the fact that one structure fits all cases. These are often just glorified cookie-cutter approaches that stifle original thought, create pedestrian answers that lack tactical or strategic brilliance, and make it harder to set yourself apart from the competition.  

Student: I’d like to break this down into a few buckets. Company G, the luxury industry, company H, acquisition costs and risks, and exit strategy.

  The student should turn their paper toward the interviewer and walk the interviewer through each bucket, touching on the headings first.  

  After explaining your structure, state your initial hypothesis. You can state “My hypothesis is…” or “My thoughts are that G should buy H to control costs and maintain fat margins.”It is important to remember to state a hypothesis.  

Interviewer: Okay, good. This is what I know about G. (Hands the student a small chart).

Student: Thanks. (Does some quick calculations) It looks like revenues increased 2%, and its profit margin stayed constant at around 15%. How does that compare to the industry overall?

  In every case there will be math. The most common math is percentages. You need to be able to do them on the fly – quickly in your head. Consultants like to put things in perspective which is why they always do two things: they quantify related numbers as percentages and ask for trends. If you don’t do those two things automatically, you need to start from this day on.   At the end of the case the interviewer will ask you for a recommendation. Lead with the recommendation, state a clear “yes” or “no”. Do not say “I think they…” be definitive. Your M&A recommendation should include; yes or no, why, the risks involved (in order of severity) and the next steps, both for the short-term and long-term.  

Student: Yes, G should buy H if the price is acceptable. Why? to ensure an uninterrupted flow of alligator and to control costs. The risks are that the bottom falls out of the alligator market or it becomes less fashionable. Some next steps: let H be H and don’t try to integrate the two companies. The cultures are too different. Continue to supply all customers at a small price increase because the margins on alligator is greater than on alligator products.

  Once you give your recommendation there is a good chance, that regardless of your decision, the interviewer will take the other side of the argument and say “Let me tell you why you are wrong.”

The interviewer is looking for you to defend your answer without getting defensive, make a persuasive argument while keeping your confidence high.   About the author: Marc Cosentino is the president of CaseQuestions.com and the former Associate Director of Career Services at Harvard for 18 years. Marc is a graduate of Harvard’s Kennedy School, Harvard’s Program on Negotiation and the University. His firm also works with Fortune 500 companies to help train their Ph.D.s how to think like business people.

This article is part of CrystalConnect, an outreach initiative by MBA Crystal Ball.

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I Have scored 700 in GMAT and have 3 years of work experience with 2 years in startup as head of marketing and CEO of its child company with GPA of 4 /4 . Can you give me an idea whether i have a chance of admission in Rotman Canada with scholarship.

hi sir, i am an english literature student.i wan’t to do MBA.which will be easier and best to me after my BA?

@Kumar: It’s tough to answer such questions. Here’s why: https://www.mbacrystalball.com/blog/2011/10/26/how-not-to-select-business-schools-mba-application-don%e2%80%99ts/

But you do have a decent profile. So, go ahead and put in your best shot. Make sure you also target other bschools in Canada, since Rotman is so competitive. Always good to have a backup option.

@Vasundhara: You’ll have to share much more about yourself (like your work experience, career goals, test scores) for us to provide any helpful response.

Hello, I am from India. I am working in Investment Banking industry from One and half years. I want to know for which Master Degree I should go for…. I want to go abroad and work there in big Investment Banking firms . Thank you

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How to master M&A consulting case studies?

M&A deals can involve huge sums of money. For instance, the beer company AB InBev spent $130bn on SAB Miller, one of its largest competitors, in 2015. As a comparison, South Africa's GDP was ~$300bn the same year.

These situations can be extremely stressful for companies' executives both on the buying and selling sides. Most CEOs only do a handful of acquisitions in their career and are therefore not that familiar with the process. If things go wrong, they could literally lose their job.

As a consequence, management consultants are often brought into these situations to help. Most top firms including McKinsey, BCG and Bain have Partners specialised in helping CEOs and CFOs navigate M&A.

There is therefore a good chance that you will come across an M&A case study at some point in your consulting interviews . Preparing for this situation is important. Let's first step through why companies buy each other in the first place. Second, let's discuss how you should structure your framework in an M&A case interview. And finally, let's practice on an M&A case example.

Click here to practise 1-on-1 with MBB ex-interviewers

Why do companies buy each other.

Imagine you are the CEO of a large beer company called AB InBev. What are the reasons you would decide to buy your competitor SAB Miller? Let's step through the three most common ones.

Reason #1: Undervaluation

The first reason you might decide to buy SAB Miller is that you think it is undervalued by the stock market. For instance, SAB Miller owns leading beer brands in Africa and China. And your analysis might suggest that beer consumption in these markets is going to grow even faster than everyone else expects. The stock market might value SAB Miller at $130bn, but you think it is actually worth $150bn because of the insights you on have on Africa and China. If that's only reason you are buying, you would behave as a pure financial investor.

Reason #2: Control

The second reason you might buy SAB Miller is that you think it is poorly managed and you can do a better job than the current management if you get control. For instance, you might think that SAB Miller's marketing team really isn't doing a good job. The current revenues of the company are $50bn, but you estimate that you can grow these revenues to $55bn by adjusting the marketing messages and without spending additional money. In that case, you'll pay $130bn for SAB Miller today, but once you've adjusted the marketing strategy and increased revenues, it will be worth much more.

Reason #3: Synergies

The final reason you might buy SAB Miller for $130bn is that you think you can create value by combining it with your own company. Let's assume AB InBev was worth $200bn at the time of the purchase. As the CEO you could have reasons to believe that the combination of both companies would be worth MORE than the individual parts; i.e. more than $330bn ($200bn + $130bn). For instance, if you combine both entities, you might decide to keep the AB InBev marketing team and to let go the SAB Miller one. The combined entity would maintain the same revenues but have lower costs and therefore higher profits. This is what's called synergies.

Having a high-level understanding of the three concepts above is more than enough for the purpose of case interview preparation . But if you are interested in the topic and would like to read more about it, we would recommend the following McKinsey article about successful acquisition strategies .

M&A case framework

Right, now that you have a high-level understanding of why companies buy each other in the first place, let's discuss the framework you should use to analyse the transaction.

Partners at McKinsey, BCG and Bain typically look at 4 areas when working on M&A cases. Let's step through them one by one and list the questions you'd want to answer in each.

1. The market

The first area consultants typically analyse in M&A cases is the market. This is extremely important because a big part of the success or failure of the acquisition will depend on broader market dynamics. Here are some of the questions you could look into:

• Are both companies (buyer / target) in the same markets (e.g. geographies, customers, etc.)?
• How big is the market? And how fast is it growing?
• How profitable is the market? And is its profitability stable?
• How intense is the competition? Are there more and more players?
• How heavily regulated is the market? Are there barriers to entry?

2. The target

The second important area to analyse is the company you are thinking of acquiring (i.e. the target). Your overall objective here will be to understand how attractive it is both financially and strategically.

• What is the current and future financial position of the target (e.g.: revenues, profits, etc.)? Is it under / overvalued?
• Does the target own any assets (e.g.: technology, brands, etc.) or capabilities (e.g.: manufacturing know-how) that are strategically important to the buyer?
• What's the quality of the current management? Do we believe we can add value by getting control and running the company better?
• Is the target company's culture very different? If so, are we confident it could still integrate well with the buyer?

3. The buyer

The third area consultants typically analyse is the buyer (i.e. the company buying the target). It is important to have a good understanding of what's motivating the purchase the target and whether the buyer has adequate financial resources.

• What's the acquisition rationale? Undervaluation, control, synergies or a combination?
• Can the buyer easily finance the acquisition? Or will it need to lend money?
• Does the buyer have any experience in integrating companies? Was it successful in the past?
• Is this the right time for the buyer to acquire another player? Does it risk losing focus?

4. Synergies and risks

And finally, the last area to analyse is the synergies and risks related to the acquisition. This is usually the hardest part of the analysis as it is the most uncertain.

• What is the value of the individual and combined entities?
• Are there cost synergies (e.g.: duplication of roles, stronger buying power, etc.)?
• Are there revenue synergies (e.g.: product cross-selling, using the target's distribution channels for the buyer's products, etc.)?
• What are the biggest risks that could make the acquisition fail (e.g. culture fit, regulation, etc.)?

It is almost impossible to cover all these aspects in a 40mins case interview. Once you will have laid out your framework, your interviewer will then typically make you focus on a specific area of the framework for the rest of the case. This is usually the market, or the target company. But can also sometimes be the other two points.

M&A case examples

Ok, now that you know how to analyse M&A situations, let's step through a few real life examples of acquisitions and their rationale. For each example, you should take a few minutes to apply the framework you've just learned. Once you have done that, you can then read the actual acquisition rationale.

Situation #1: At the beginning of the 2010s, IBM went on an acquisition spree and purchased 43 companies over 3 years for an average of $350 million each. All of these companies had smaller scale than IBM and slightly different technology.

Rationale: The main reason IBM decided to buy these 40+ companies is that they could all benefit from the firm's global sales force. Indeed IBM has a presence in the largest software markets in the world (e.g. North America, Europe, etc.) that smaller companies just don't have. IBM estimates that thanks to its footprint it could accelerate the growth of the companies it purchased by more than 40 percent over the two years following the acquisition in some cases. This is a typical product distribution synergy.

Situation #2: In 2010, Apple decided to buy Siri, its now famous voice assistant. And in 2014, it decided to purchase Beats Electronics which had just launched a music streaming business. Both acquisitions were motivated by similar reasons.

Rationale: In both the Siri and Beats cases, Apple had the capabilities to develop the technology / product it was purchasing itself. It could have built its own voice assistant, and its own music streaming business. But it decided not to. The reason they thought it would be better to buy a competitor is that it was going to enable them to offer these solutions to their customers QUICKER. To be more precise, they probably estimated that offering these products quicker was worth more money than the savings they would make by developping the technology on their own. This is a typical revenue synergy that's widespread in the technology space.

Situation #3: Volkswagen, Audi and Porsche have been combined companies since 2012. Mergers are common in the automative industry and usually motivated by a central reason.

Rationale: The cost to develop a new car platform is really high. It takes years, hundreds of people and millions of dollars. By belonging to the same group, Volkswagen, Audi and Porsche can actually share car platforms and reuse them for different models with different brands. For instance, the Audi Q7, the Porsche Cayenne and the VW Tourage all run on the same underlying platform. This is a typical cost synergy.

Acquisitions are high-stake situations during which CEOs often feel they need the support of consultants. You should therefore expect to come across M&A cases at some point during your interviews. That being said, your interviewer won't expect you to be an M&A expert. Having a high-level understanding of what motivates companies to buy each other as well as knowing the framework listed above should be sufficient M&A knowledge.

After all, M&A cases, are normal case interviews. What will determine if you succeed or not is your ability to think and communicate in a structured way, not your detailed knowledge of how M&A works. So it's a good idea to spend some time on M&A cases, but don't let it distract you from your broader case interview preparation.

Mock interviews

The best way to improve at case interviews is to practise interviewing out loud, and you can do that in three main ways:

• Interview yourself (out loud)
• Practise interviewing with friends or family
• Practise interviewing with ex-interviewers

Practising by yourself is a great way to get started, and can help you get more comfortable with the flow of a case interview. However, this type of practice won’t prepare you for realistic interview conditions. 

After getting some practice on your own, you should find someone who can do a mock interview with you, like a friend or family member.

We’d also recommend that you practise 1-1 with ex-interviewers from top consulting firms . This is the best way to replicate the conditions of a real case interview, and to get feedback from someone who understands the process extremely well.

Click here to book your mock case interview.

TCLA - The Corporate Law Academy

Mergers and acquisitions case studies and interviews | a guide for future lawyers.

Jaysen Sutton -

18 min read

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 mergers and acquisitions case studies and interviews, a guide for future lawyers.

Enjoyed this post? Check out our new Mergers and Acquisitions Course , which covers exactly what you need to know about M&A for interviews at top commercial law firms. Free access to this course is given to all premium subscribers .

If you don’t know what commercial law is or what commercial lawyers do, it’s hard to know whether you want to be one.

I’m going to discuss one aspect of commercial law: mergers and acquisitions or “M&A”, and with any luck, convince you it can be exciting.

I’ll also cover many of the aspects of mergers and acquisitions that you need to know for law firm interviews and case study exercises.

Let’s begin with an example, which highlights the impact of mergers and acquisitions. In 2017, Amazon bought Whole Foods and became the fifth largest grocer in the US by market share. This single manoeuvre shed almost $40 billion in market value from companies in the US and Europe .

The fall in value of rival supermarkets reflected fears over Amazon’s financial capacity and its potential to win a price war between supermarkets. Amazon the customer data to understand where, when and why people buy groceries, and it has the technology to integrate its offline and online platforms. When you’re in the race to be the first trillion-dollar company, acquisitions can take you a long way ( Edit: In August 2018, Apple managed to beat Amazon to win this title ).

But not all companies share Amazon’s success. In fact, out of 2,500 M&A deals analysed by the Harvard Business Review, 60% destroyed shareholder value .

That begs the question:

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Why do firms merge or acquire in the first place?

I’ll use law firms as an example. You’ll have seen that they often merge, or adopt structures called Swiss vereins, which allow law firms to share branding and marketing but keep their finances and legal liabilities separate.

In the legal world, it can be hard to find organic growth or organic growth can be very slow. Clients like to shop around, which can make it hard to retain existing business. It’s competitive: other law firms can poach valuable partners and bring their clients with them. And whilst entering new markets is an attractive option, it’s expensive, often subject to heavy-regulation and requires the resolve and means to challenge the existing players in that market.

Consolidation can help law firms, which are squeezed between lower-cost entrants and the global players, to compete. This is why we’ve seen many mergers in the mid-market. A combined firm is bigger, less vulnerable to external shocks, and has access to more lawyers and clients. The three-way merger between Olswang, Nabarro and CMS is a good example of this. The year before its merger, Olswang had revenues below £100m and a 77% fall in operating profit. Now, under the name CMS, it’s one of the largest UK law firms by lawyer headcount and revenue.

But mergers aren’t only a defensive move. They can allow law firms to speed-up entry into new markets. For example, were it not for its merger, it would have been difficult for Dentons to open an office in China. Chinese clients, especially state-owned enterprises, are often less likely to pay high legal fees, while local expertise and personal relationships can play a bigger role. There’s also regulation, which prevents non-Chinese lawyers from practicing Chinese mainland law, and plenty of competition from established Chinese law firms. That helps to explain Dentons’ 2015 merger with Dacheng, a firm with decades of experience and an established presence in the Chinese market. Now Dentons is positioned to serve clients investing in China, as well as Chinese clients looking for outbound work at a fraction of the time and cost.

Mergers can also synergies, or at least that’s one of the most frequently used buzzwords to justify an M&A deal. The idea is that when you combine two firms together, the value of the combined firm is more than the sum of its individual parts.

Synergies for a law firm merger could come from cutting costs by closing duplicate offices and laying off support staff. It could also be the fact that a combined law firm could sell more legal services than the two law firms individually, which may be bolstered by the fact that they can cross-sell their expertise to each other’s clients and benefit from economies of scale (e.g. better negotiating paper due to their size).

Finally, mergers can offer reputational benefits. Branding is an essential part of the legal world and combinations gain a lot of legal press. Mergers may allow fairly unknown firms to access new clients and generate far more business if they partner with an established firm. Very large global firms often pride themselves as a ‘one-stop shop’, pitching the fact that their size allows them to service all the needs of a client across any jurisdiction.

While it’s true that Swiss vereins have led the likes of DLA Piper and Baker McKenzie to develop very strong brands, collaboration hasn’t always worked out and some law firms have paid the ultimate price. Internal problems and mismanagement plagued the merger of Dewey & LeBoeuf , which, at the time, was called the largest law firm collapse in US history. Bingham McCutchen collapsed for similar reasons. Most recently, King & Wood Mallesons made the mistake of merging with an already troubled SJ Berwin. Poor incentive structures, defections and a fragile merger structure later led to the collapse of KWM Europe. Only time will tell whether Dentons’ 31 plus combinations, as well as the aggressive use of Swiss vereins by other firms, will be a success.

So that’s the why, I’ll now go through the how. Note, in this article, I’ll discuss the mechanics of acquisitions rather than mergers: you can see the difference in the definitions section below. As lawyers, you’ll find acquisitions are more common and you’re more likely to be asked about the acquisition process in law firm interviews and assessment centres.

Mergers & Acquisitions Definitions

• Acquisition : The purchase of one company by another company.
• Acquirer / Buyer : The company purchasing the target company.
• Asset purchase : The purchase of particular assets and liabilities in a target company. An alternative to a share purchase.
• Auction sale : The process where a company is put up for auction and multiple buyers bid to buy a target company.
• Due diligence : The process of investigating a business to determine whether it’s worth buying and on what terms it should be bought.
• Debt finance : This means raising finance through borrowing money.
• Equity finance : This means raising finance by issuing shares.
• Mergers : When two companies combine to form a new company.
• Share purchase : When a company buys another company through the purchase of its shares. An alternative to an asset purchase.
• Swiss verein : In the law firm context, this is a structure used by some law firms to ‘merge’ with other law firms. They share marketing and branding, but remain legally and financially separate.
• Target company : The company that is being acquired.

Kicking off the Acquisition Process

The buy side.

Sometimes the acquirer will have identified a company it wants to buy before it reaches out to advisers. Other times, it’ll work closely with an investment bank or a financial adviser to find a suitable target company.

Before making contact with the target company, the acquirer will typically undertake preliminary research, often with the help of third-party services to compile reports on companies. They’ll look through a range of material including:

• news sources and press releases
• insolvency and litigation databases
• filings at Companies House
• the industry and competitors

The aim is to better understand the target company. The company’s management will want to check for any big risks and form an early view of the viability of an acquisition. Then, if they’re convinced, the first contact may be direct or arranged through a third party, such as an investment bank or consultant.

Note: In practice, lawyers – especially trainees – spend a lot of time using the sources above. Companies House is a useful online resource to find out about private companies. It’s where you’ll find their annual accounts, annual returns (now called a confirmation statement) and information on the company’s incorporation.

The sell side

Sometimes, a target company wants to sell. The founders may want to retire, the company may be performing poorly, or investors may want to cash out and move on.

If a target company wants more options, it may initiate an auction sale. This is a competitive bid process, which tends to drive bid prices up and help the target company sell on the best terms possible. For example, Unilever sold its recent spreads business to KKR using this method.

But, an auction sale isn’t always appropriate. Sometimes the target company will enter discussions with just one company. This may be preferable if the company is struggling, so it can ensure speed and privacy, or the target company may have a particular acquirer in mind. For example, Whole Foods used a consultant to arrange a meeting with Amazon . That was after reading a media report which suggested Amazon was interested in buying the company.

Friendly v Hostile Takeovers

In the UK, takeovers are often used to refer to public companies. While we’ll be focusing on acquisitions of private companies, I’ll cover this here because they’re often in the news and sometimes come up in law firm interviews.

The board of directors are the people that oversee a company’s strategy. Directors owe duties to shareholders –  the owners of the company – and are appointed by the shareholders to manage a company’s affairs.

If a proposed acquisition is brought to the attention of the board and the board recommends the bid to shareholders, we call this a friendly takeover. But if they don’t, it’s a hostile takeover, and the acquirer will try to buy the company without the cooperation of management. This may mean presenting the offer directly to shareholders and trying to get a majority to agree to sell their shares.

Sometimes, it’s not too difficult; Cadbury’s board first rejected Kraft’s bid and accused the company of attempting to buy Cadbury “on the cheap”. Later, when Kraft revised its offer, the board recommended its bid to shareholders.

In other situations, hostile takeovers can be messy, especially if neither party wants to back down. This was the case in 2011 between the infamous activist investor Carl Icahn and The Clorox Company.

Icahn and the Clorox Company

In 2011, Carl Icahn made a bid to buy The Clorox Company (Clorox), the owner of many consumer products including Burt’s Bees. In his letter to the board, Icahn also tried to start a bidding war, inviting other buyers to step in and bid.

Clorox’s board rejected Icahn’s bid and quickly hired Wachtell, Lipton, Rosen & Katz, a US law firm, to defend itself. Wachtell wasn’t just any law firm. Icahn and Wachtell had been rivals for decades. In fact, between 2008 and 2011, Wachtell had successfully defended two companies from Icahn.

This was round three.

Clorox adopted a “poison pill” strategy, a tactic that allowed Clorox’s existing shareholders to buy the company’s shares at a discount. This made the attempted takeover more expensive. Martin Lipton, one of the founding partners of Wachtell, had invented the poison pill to prevent hostile takeovers in the 80’s. It was “one of the most anti-shareholder provisions ever devised” according to Icahn. Now, Clorox was using this weapon to stop the activist investor.

But that didn’t stop Icahn. In a scathing letter to the board , he raised his bid for the company.  A week later, the board rejected it again.

Icahn made a third bid. This time his letter threatened to remove the entire board. But the board didn’t back down.

Eventually, Icahn did.

The war between Icahn and Wachtell didn’t stop there. In 2013, Wachtell successfully defended Dell from Icahn. A few months after that, Icahn tried to sue Wachtell. In response, the law firm said:

“ Icahn takes his bullying campaign to a new level, seeking to intimidate lawyers who help clients resist his demands by making wild allegations and threatening liability. Those tactics will not work here .”

Remember when I said corporate law could be exciting?

What are the ways a company can acquire another company?

This is one of the most common questions in law firm commercial interviews.

There are two ways to acquire a company. A company can buy the shares of a target company in a share purchase or buy particular assets (and liabilities) in an asset purchase.

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Share Purchase

In a share purchase, the acquirer buys a majority of shares in the target company and therefore becomes its new owner . This means all of the company’s assets and liabilities transfer automatically, so, usually, there’s no need to worry about securing consent from third parties or transferring contracts separately. This is great because the business can continue without disruption and the transition is fairly seamless.

However, as the liabilities of a company also transfer in share purchase, it’s important the acquirer investigates the target really well. It’ll also want to try protect itself from known risks when negotiating the acquisition agreement.

For example, suppose three months after the acquisition has completed, a former employee brings an unfair dismissal claim against the acquirer. If this was something they had known about pre-acquisition, they’ll want to be indemnified for those costs (we’ll come back to this later).

Conversely, if they didn’t know about it at the time of the acquisition and they didn’t protect themselves in the acquisition agreement, they’ll have to pay out. That’s one of the risks of doing a share purchase. (Although as we’ll discuss later, there are certain things you can do to reduce the risks of this happening.)

Asset Purchase

We call this an asset purchase . It means that the acquirer identifies the specific assets and liabilities it wants to buy from the target and leaves everything else behind. That’s great because the acquirer will know exactly what it’s getting and there’s little risk of hidden liabilities.

However, asset purchases are less common and can be difficult to execute. Unlike share purchases, assets don’t transfer automatically, so the acquirer may have to renegotiate contracts or seek consent from third parties to proceed with the acquisition.

Preliminary Agreements

Confidentiality agreements.

Before negotiations begin, the target company will want the acquirer to sign a confidentiality agreement or a non-disclosure agreement.

This is important because the seller will provide the acquirer with access to private information during the due diligence process. Suppose the acquirer decided not to proceed with the acquisition and there was no confidentiality agreement in place; the acquirer could use this information to poach staff, better compete with the target or reveal damaging information to the public.

So, lawyers for the acquirer and the target company will negotiate the confidentiality agreement. They’ll decide what counts as confidential, what happens to information if the acquisition doesn’t complete, as well as any instances where confidential information can be passed on without breaching the contract.

Exclusivity Agreements

If an acquirer is dead set on buying a particular target company then, in an ideal situation, it will want to be the only one negotiating with that company. This would give the acquirer time to conduct due diligence and negotiate on price, without pressure from competitors. It also ensures secrecy.

If the acquirer has some bargaining power, it may try to sign an exclusivity agreement with the target company. This would ensure, for a period of time, the target company does not discuss the acquisition with third parties or seek out other offers.

While it’s unclear whether an exclusivity agreement was actually signed, Amazon was clear during early negotiations with Whole Foods that it wasn’t interested in a “multiparty sale process ” and warned it would walk if rumours started circulating. That was effective: Whole Foods chose not to entertain the four private equity firms who’d expressed interest in buying the company.

Heads of Terms

The first serious step will be the negotiation of the Heads of Terms (also called the Letter of Intent) between the lawyers, on behalf of the parties. This document details the main commercial and legal terms that have been agreed between the parties, including the structure of the deal, the price, the conditions for signing and the date of completion. It’s not legally binding – so the acquirer won’t have to buy and the target company won’t have to sell if the deal doesn’t go through – but it serves as a record of early negotiations and a guideline for the main acquisition document.

Due Diligence

An acquirer can’t determine whether it should buy a target without detailed information about its legal, financial and commercial position. The process of investigating, verifying and reviewing this information is called due diligence.

The due diligence process helps the acquirer to value the target. It’s an attempt at better understanding the target company, quantifying synergies and determining whether an acquisition makes financial sense.

Due diligence also reveals the risks of an acquisition. The acquirer can examine potential liabilities, from customer complaints to litigation claims or scandals. This is important because underlying the process of due diligence is the principle of  caveat emptor , which means “let the buyer beware”. This legal principle means it’s up to the buyer to fully investigate the company before entering into an agreement. In other words, if the buyer failed to discover something during due diligence, it’s their problem. There’s no remedy after the acquisition agreement is signed.

So if the problems uncovered during the due diligence process are substantial, the acquirer may decide to walk away. Alternatively, it could use this information to negotiate down the price or include terms to protect itself in the main acquisition document.

In an asset purchase, due diligence is also an opportunity to identify all the consents and approvals the buyer needs to acquire the company.

Due Diligence Teams

The acquirer will assemble a team of advisers, including bankers, accountants and lawyers, to manage the due diligence process. The form and scope of the review will depend on the nature of the acquisition. For example, an experienced private equity firm is likely to need less guidance than a start-up’s first acquisition. Likewise, a full due diligence process may not be appropriate for a struggling company that needs to be sold quickly.

Due diligence isn’t cheap, but missing information can be devastating. In a Merger Market  survey , 88% of respondents said insufficient due diligence was the most common reason M&A deals failed. HP had to write off $8.8 billion after its acquisition of Autonomy – which was criticised for being a result of HP’s ‘ faulty due  diligence ‘. Few also looked into organisational compatibility in the merger between AOL and Time Warner, which led to the “ biggest mistake in corporate history ”, according to Jeff Bewkes, chief executive of Time Warner. In 2000, Time Warner had a market value of $160 billion. In 2009, it was worth $36 billion.

Types of Due Diligence

Financial due diligence  This involves assessing the target company’s finances to determine its health and future performance.

Business due diligence  This involves evaluating strategic and commercial issues, including the market, competitors, customers and the target company’s strategy.

Legal Due Diligence

Legal due diligence is the process of assessing the legal risks of an acquisition. By understanding the legal risks of an acquisition, the acquirer can determine whether to proceed and on what terms.

The acquirer’s lawyers have a few ways of obtaining information for their due diligence report. They’ll prepare a questionnaire for the seller to complete and request a variety of documents. This will all be stored in a virtual ‘data room’ for all parties to access. They may also undertake company, insolvency, intellectual property and property searches, interview management and, if appropriate, undertake on-site visits.

Law firms tend to have a system to manage the flow of information and trainees are often very involved. They’ll review, under supervision, much of the documentation and flag up potential risks.

Legal due diligence reports are typically on an ‘exceptions’ basis. This means they’ll flag to the client only the material issues. You can see why this is valuable to the client; rather than raising every possible issue, they’ll apply their commercial judgement to inform the clients about the most important issues.

The report will propose recommendations on how to handle each identified issue. This may include: reducing the price, including a term in the agreement or seeking requests for more information. If the issue is significant, lawyers will want to tell their client immediately, especially if what they find is very serious.

Note, due diligence is a popular topic for interviews. You may be asked to recommend possible solutions to issues uncovered during the due diligence process or asked to discuss the issues that different departments may consider (see examples below).

What are lawyers looking for during due diligence?

What might corporate investigate.

The group structure of the target, including the operations of any parent companies or subsidiaries

The company’s constitution, board resolutions, director appointments and resignations, and shareholder agreements.

Important details from Insolvency and Companies House searches

Copies of contracts for suppliers, distributors, licences, agencies and customers.

Termination or notification provisions in contracts

What do they want to know?

Whether shareholders can transfer their shares (share purchase)

Whether shareholders need to approve the sale and the various voting powers of shareholders

Any change of control provisions in contracts

Whether the target can transfer assets (asset purchase)

Any outstanding director loans, director disqualifications, or conflicts of interest

What might Finance investigate?

Existing borrowing arrangements including loan documents and any guarantees

Correspondence with lenders and creditors

Share capital, allocation and employee share schemes

Assets and financial accounts

The company’s ability to pay current and future debts

Any prior loan defaults, credit issues or court judgements

Details of ownership and title to the assets

Any liabilities which could limit the performance of the target

Whether borrowing would breach existing loan terms

Whether the loan agreements have any change of control clauses

Whether security has been granted over the target’s assets to lenders

What might Litigation investigate?

Details of any past, current or pending litigation

Disputes between the company, employees or directors

Regulatory and compliance certificates

Any judgements made against the company

Insurance policies

The risk of outstanding or future claims against the company

Details of any regulatory or compliance investigations

Potential issues or threatened litigation from customers, employees or suppliers in the past five years

What might Property investigate?

Documents relating to freehold and leasehold interests

Inspections, site visits, surveyors and search reports

Health and safety certificates and building regulation compliance

Leases and licences granted to third parties

Whether the property will be used or sold

Property liabilities

Title ownership and lease/licensing terms

The value of the properties

Details of regulatory compliance

What might Employment investigate?

Director and employee details, and service contracts

Pension schemes and employee share schemes

Pay, benefits and HR policy information

Information in relation to redundancies, dismissals or litigation

Plans to retain key managers, redundancy and compensation

Pension scheme deficits

Termination or change of control provisions

Compliance with employment law and consultation

Risks of dismissal claims

Evaluate post-acquisition integration

What might Intellectual Property investigate?

List of any trademarks, copyright, patents, domain names and any other registered intellectual property

Registration documents and licencing agreements

Litigation and related correspondence

Searches at the Intellectual Property Office

Current or potential disputes, claims of threatened litigation in relation to infringement

Whether the seller has renewed trademarks

Who has ownership of the intellectual property

Whether they can transfer licenses and gain consents

Details of critical assets, confidentiality provisions and trade secrets

[/one_second] [divider height=”30″ style=”default” line=”default” themecolor=”1″]

The Acquisition Agreement

The main legal document is the sale and purchase agreement or “SPA”. It sets out what the acquirer is buying, the purchase price and the key terms of the transaction.

Purchase Price

A company will usually pay for an acquisition in cash, shares, or a combination of the two.

Cash is a good option if an acquirer is confident in the acquisition. If it believes the shares are going to increase in value (thanks to synergies), paying in cash means it can soak up the benefits without having to give up ownership of the company. It is, however, expensive to pay in cash. The buyer must raise money if it doesn’t already have enough cash reserves by issuing shares or borrowing.  Most sellers also want cash. It means they’ll know exactly how much they’re getting and don’t have to worry about the future performance of a company.

Other times, an acquirer will want to use shares to pay for an acquisition. The target’s shareholders will get a stake in the acquirer in return for selling their shares. If the value of the acquirer’s shares increases, the shareholders may get a better return. Often, this option will be more attractive for an acquirer as it doesn’t use up cash. Receiving shares can also be valuable for the seller if they’re gaining shares in a promising company. Conversely, however, they must bear the risk that the value of the acquirer falls.

Key terms of the transaction

Both parties will make assurances to each other in the form of terms in the SPA. These terms are heavily negotiated between lawyers.

Warranties and representations

Warranties are statements of fact about the state of the target company or particular assets or liabilities. For example, the seller may warrant that the target isn’t involved in any litigation, that its accounts are up to date and that there are no issues with its properties. If these warranties turn out to be false, the acquirer may claim for damages. However, there are limitations: the acquirer will have to show that the breach reduced the value of the business and that can be hard to prove.

During negotiations, the seller will try to limit the scope of the warranties. It’ll also prepare a disclosure letter to qualify each warranty. For example, the seller may qualify the above warranty with a list of outstanding litigation claims. If the seller discloses against a warranty, they won’t be liable for a breach. Disclosure is also useful for the acquirer because it may reveal information that was not found during due diligence.

The acquirer will want some of these statements to be representations. Representations are statements which induce the acquirer to enter into a contract. If these are false, the acquirer could have a claim for misrepresentation. That could give the acquirer a stronger remedy, including termination of the contract or a bigger claim for damages. This is why the seller will usually resist giving representations.

Indemnities

Indemnities are promises to compensate a party for identified costs or losses. This is appropriate because the acquirer may identify potential risks during due diligence; for example, the risk of an unfair dismissal claim or a litigation suit. The acquirer can seek indemnities to be compensated for these particular liabilities arising in the future. This is a way to allocate risks to the seller: if the event occurs the acquirer will be reimbursed by the seller.

Conditions Precedent

The SPA may be signed subject to the satisfaction of the conditions precedent or “CPs”. These are conditions that must be fulfilled before the acquisition can complete. That could mean, for example, securing consent from third parties, shareholder approval or merger clearance. Trainees are often responsible for keeping track of the conditions precedent checklist, and they’ll need to chase parties for the approvals to ensure all conditions are satisfied.[divider height=”30″ style=”default” line=”default” themecolor=”1″]

Signing and Completion

This is the big day. Signing can take place in person or virtually. Each party will return the SPA with their signature in accordance with the relevant guidelines. It’ll be the trainees responsibility to check that the SPA has been signed correctly and to collate the documents.

Final Thoughts

If you’re reading this to prepare for an interview, I’d suggest you explore the “acquisition structure”, “legal due diligence” and “warranties and indemnities” sections – these are common case-study questions. We cover this in more detail and with practice interview answers in our mergers and acquisitions course, which is free for TCLA Premium members.

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Mastering M&A: Your Ultimate Guide for Understanding Mergers and Acquisitions

• August 11, 2023

Table of Contents

The process of two companies or their major business assets consolidating together is known as an M&A (merger and acquisition). It is a business strategy involving two or more companies merging to form a single entity or one company acquiring another. These transactions take place entirely on the basis of strategic objectives like market growth, expanding the company’s market share, cost optimisation and the like.

M&As are also an essential component of investment banking capital markets . It helps in revenue generation, shaping market dynamics, and more. This article will provide a profound understanding of mergers and acquisitions including the types, processes, and various other nitty-gritty involved in the investment banking fundamentals relevant to this business strategy . 

Types of Mergers and Acquisitions 

There are many types associated with the mergers and acquisitions strategy. These are:

Horizontal Mergers 

The merger or consolidation of businesses between firms from one industry is known as a horizontal merger. This occurs when competition is high among companies operating in the same domain. Horizontal mergers help companies gain a higher ground due to potential gains in market share and synergies. Investment banking firms have a major role to play in identifying potential partners for this type of merger. 

Vertical Mergers 

A vertical merger occurs between two or more companies offering different supply chain functions for a particular type of goods or service. This form of merger takes place to enhance the production and cost efficiency of companies specialising in different domains of the supply chain industry. Investment banking firms help in the evaluation of said synergies to optimise overall operational efficiency.

Conglomerate Mergers 

A conglomerate merger occurs when one corporation merges with another corporation operating in an entirely different industry and market space. The very term ‘conglomerate’ is used to describe on company related to several different businesses. 

Friendly vs. Hostile Takeovers 

Leveraged buyouts (lbos) .

A leveraged buyout occurs when a company is purchased via two transactional forms, namely, equity and debt. The funds of this purchase are usually supported by the existing or in-hand capital of a company, the buyer’s purchase of the new equity and funds borrowed. 

Investment banking services are majorly relied upon throughout the entire process encompassing a leveraged buyout. Investment banking skills are necessary for supporting both sides during a bid in order to raise capital and or decide the appropriate valuation. 

Mergers and Acquisitions Process 

To succeed in investment banking careers, your foundational knowledge in handling mergers and acquisitions (M&A) should be strong. Guiding clients throughout the processes involved in M&A transactions is one of the core investment banking skills.

Preparing for Mergers and Acquisitions

To build a strong acquisition strategy, you need to understand the specific benefits the acquirer aims to gain from the acquisition. It can include expanding product lines or entering new markets.

Target Identification and Screening

The acquirer defines the requirements involved in identifying target companies. They may include criteria like profit margins, location, or target customer base. They use these criteria to search for and evaluate potential targets.

Due Diligence

The due diligence process begins after accepting an offer. A comprehensive examination is conducted wherein all aspects of the target company's operations are analysed. They may include financial metrics, assets and liabilities, customers, and the like. Confirming or adjusting the acquirer's assessment of the target company's valuation is the main goal.

Valuation Methods

Assuming positive initial discussions, the acquirer requests detailed information from the target company, such as current financials, to further evaluate its suitability as an acquisition target and as a standalone business.

Negotiating Deal Terms

After creating several valuation models, the acquirer should have enough information to make a reasonable offer. Once the initial offer is presented, both companies can negotiate the terms of the deal in more detail.

Financing M&A Transactions

Upon completing due diligence without significant issues, the next step is to finalise the sale contract. The parties decide on the type of purchase agreement, whether it involves buying assets or shares. While financing options are usually explored earlier, the specific details of financing are typically sorted out after signing the purchase and sale agreement.

Post-Merger Integration

Once the acquisition deal is closed, the management teams of the acquiring and target companies cooperate together to merge the two firms and further implement their operations.

Taking up professional investment banking courses can help you get easy access to investment banking internships that will give you the required industry-level skills you need to flourish in this field. 

Financial Analysis   

Financial statements analysis  .

Financial statement analysis of a merger and acquisition involves evaluating the financial statements of both the acquiring and target companies to assess the financial impact and potential benefits of the transaction. It may include statements like the income statement, balance sheet, and cash flow statement. It is conducted to assess the overall financial health and performance of the company.

In investment banking, financial modelling is a crucial tool used in the financial statement analysis of a merger and acquisition (M&A). Investment bankers develop a merger model, which is a comprehensive financial model that projects the combined financial statements of the acquiring and target companies post-merger. 

Cash Flow Analysis  

Examining a company's cash inflows and outflows to assess its ability to generate and manage cash effectively. In investment banking jobs , one of the primary roles is to assess the transaction structure, including the consideration paid and the timing of cash flows. 

Ratio Analysis  

Utilising various financial ratios to interpret and analyse a company's financial performance, efficiency, and risk levels. Investment banking training equips professionals with a deep understanding of various financial ratios and their significance. They learn how to calculate and interpret ratios related to profitability, liquidity, solvency, efficiency, and valuation.

Comparable Company Analysis  

Comparable Company Analysis (CCA) plays a crucial role in mergers and acquisitions (M&As) due to its importance in determining the valuation of the target company. In investment banking training , you will learn how to conduct a CCA and identify a group of comparable companies in the same industry as the target company. 

By comparing the target company's financial metrics to its peers, you can identify the company's strengths, weaknesses, and positioning within the industry and provide appropriate guidance.

Discounted Cash Flow (DCF) Analysis

Discounted Cash Flow (DCF) analysis is a crucial valuation technique used in M&As. It helps determine the intrinsic value of a company. It helps project the potential cash flows of a company in the future. DCF analysis involves factors like revenue growth, operation costs, working capital requirements and the like.  

Investment banking training provides the skills in building complex financial models that are required for DCF analysis. They develop comprehensive models that incorporate projected cash flows, discount rates, and terminal values to estimate the present value of a company.

Merger Consequences Analysis

Merger Consequences Analysis helps assess the potential outcomes and impact on financial performance, operations, and value of the entities partaking in the M&A. Investment bankers conduct an extensive evaluation to identify and quantify potential synergies that may result from the merger or acquisition, encompassing cost savings, revenue growth opportunities, operational efficiencies, and strategic advantages. 

This analysis aids in estimating the financial implications of these synergies on the combined entity.

Legal and Regulatory Considerations

If you are pursuing an investment banking career , knowledge of the various legalities involved in M&As will help you nail any investment banking interview . The regulatory legalities involved in the process of M&As that partaking entities and investment banking services need to consider:-

Antitrust Laws and Regulations

Antitrust laws and regulations aim to foster fair competition and prevent anti-competitive practices. In the context of M&A, it is vital to assess whether the combination of the acquiring and target companies could potentially harm competition significantly. 

Complying with antitrust laws may involve seeking clearance from regulatory bodies or implementing remedies to address any potential anti-competitive concerns.

Securities Laws and Regulations

Securities laws and regulations are of utmost importance in M&A transactions, considering the issuance of securities or transfer of ownership interests. Compliance with these laws governs the disclosure of material information, fair treatment of shareholders, and the filing of requisite documents with regulatory entities.

Regulatory Approvals and Filings

M&A transactions often necessitate obtaining approvals from various regulatory bodies, including government agencies, industry regulators, or competition authorities. These approvals ensure adherence to specific industry regulations and are typically indispensable for proceeding with the transaction. 

Additionally, filings and disclosures like Form S-4 or 8-K, may be mandatory for furnishing relevant information about the transaction to legal authorities.

Confidentiality and Non-Disclosure Agreements

Confidentiality is crucial throughout M&A transactions. To safeguard sensitive information and trade secrets, parties involved usually enter into non-disclosure agreements (NDAs). These NDAs outline the terms and conditions governing the sharing and handling of confidential information throughout the entire transaction process.

M&A Documentation

The following M&A documents are instrumental in organising and formalising the holistic M&A process. They give clarity, safeguard the interests of all parties included, and guarantee compliance with pertinent legal and regulatory prerequisites all through the transferring process.

Letter of Intent (LOI)  

The Letter of Intent (LOI) is the first and most urgent document that frames the agreements proposed in an M&A. It fills in as the commencement for exchanges and conversations among the gatherings participating in the business procedure.

Merger Agreement  

The Merger Agreement is a legally approved contract that covers every detail of the merger. It may include crucial information like the price of purchase, terms of payment, warranties, post-closure commitments and representations. This arrangement formalises the responsibilities between the partaking parties.

Share Purchase Agreement  

The Share Purchase Agreement is a legally binding contract that oversees the assets of the target organisation being acquired. It frames the terms, conditions, and legitimate liabilities connected with the exchange of ownership interests.

Asset Purchase Agreement  

An Asset Purchase Agreement is utilised when particular assets of the target organisation are being gained. It is a legal contract that sets out the regulatory commitments attached to the procurement and division of those assets.

Confidentiality Agreements  

Confidentiality Agreements, also known as Non-Disclosure Agreements (NDAs), play a major role in protecting sensitive data collected during the M&A cycle. They lay out rules and commitments to guarantee the safe handling and non-exposure of restrictive proprietary information and secrets.

Due Diligence Checklist  

The Due Diligence Checklist is a broad list that helps direct the assessment process by framing the important documents, data, and areas to be evaluated. It works with an exhaustive and deliberate evaluation of the objective organisation's monetary, legal, functional, and business viewpoints.

M&A Case Studies   

M&A case studies serve as a hub of knowledge, enabling companies to make informed decisions and avoid common pitfalls. By delving into these real-world examples, organisations can shape their M&A strategies, anticipate challenges, and increase the likelihood of successful outcomes. Some of these case studies may include:-  

Successful M&A Transactions  

Real-life examples and case studies of M&A transactions that have achieved remarkable success provide meaningful insights into the factors that contributed to their positive outcomes. By analysing these successful deals, companies can uncover valuable lessons and understand the strategic alignment, effective integration processes, synergies realised, and the resulting post-merger performance. 

These case studies serve as an inspiration and offer practical knowledge for companies embarking on their own M&A journeys.

Failed M&A Transactions  

It's equally important to learn from M&A transactions that did not meet expectations or faced challenges. These case studies shed light on the reasons behind their failure. We can examine the cultural clashes, integration issues, financial setbacks, or insufficient due diligence that led to unfavorable outcomes. 

By evaluating failed M&A deals, companies can gain valuable insights so they can further avoid the pitfalls and consider the critical factors to build a successful M&A strategy.

Lessons Learned from M&A Deals  

By analysing a wide range of M&A transactions, including both successful and unsuccessful ones, we can distill valuable lessons. These case studies help us identify recurring themes, best practices, and key takeaways. 

They provide an in-depth and comprehensive understanding of the various pitfalls and potential opportunities involved in an M&A that can enhance their decision-making processes to develop effective strategies.

Taking up reliable investment banking courses can be instrumental in taking your career to unimaginable heights in this field. 

M&A Strategies and Best Practices   

By implementing the following M&A strategies, companies can enhance the likelihood of a successful merger or acquisition:

Strategic Fit and Synergies  

One of the key aspects of M&A is ensuring strategic fit between the acquiring and target companies. This involves evaluating alignment in terms of business goals, market positioning, product portfolios, and customer base.

Integration Planning and Execution  

A well-balanced integration plan is crucial for a successful M&A. It encompasses creating a roadmap for integrating the acquired company's operations, systems, processes, and people. 

Effective execution of the integration plan requires careful coordination, clear communication, and strong project management to ensure a seamless transition and minimise disruption.

Cultural Integration  

Merging organisations often have different cultures, values, and ways of doing business. Cultural integration is essential to aligning employees, fostering collaboration, and maintaining morale. Proactively managing cultural differences, promoting open communication, and creating a shared vision can help mitigate integration challenges and create a cohesive post-merger organisation.

Managing Stakeholders  

M&A transactions involve multiple stakeholders, including employees, customers, suppliers, investors, and regulatory bodies. Managing their expectations, addressing concerns, and communicating the strategic rationale and benefits of the deal are all crucial. 

Engaging with stakeholders throughout the process helps build trust and support, ensuring a smoother transition and post-merger success.

Risk Management in Mergers and Acquisitions  

M&A transactions involve inherent risks that need to be effectively managed. Conducting comprehensive due diligence, identifying and assessing potential risks, and developing risk mitigation strategies are essential steps. 

It's important to consider legal and regulatory compliance, financial risks, operational challenges, cultural integration issues, and potential resistance from stakeholders.

Post-Merger Performance Evaluation  

Evaluating the performance of the merged entity post-transaction is critical to assessing the success of the deal and identifying areas for improvement. This involves tracking financial performance, measuring synergies realised, monitoring customer and employee satisfaction, and conducting periodic assessments. 

Continuous evaluation helps refine strategies and ensure the realisation of intended benefits.

Conclusion   

Mergers and acquisitions (M&A) are intricate processes that require in-depth knowledge and expertise in investment banking operations. The components discussed, such as M&A documentation, case studies, and strategies, emphasise the importance of comprehensive analysis, due diligence, and risk management. 

Many students tend to pursue investment banking careers because of the comparatively high investment banking salary involved. If you are one of these enthusiasts, pursuing a Certified Investment Banking Operations Professional course from Imarticus can provide you with the investment banking certification you need to get started . 

This course help you develop the specialised skills and knowledge required for a successful career in investment banking . It covers essential topics related to M&A, financial analysis, valuation methods, and regulatory considerations, equipping learners with the necessary tools to navigate the complexities of M&A transactions.

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Global Merger LafargeHolcim : Interview and Case Study

• First Online: 08 August 2017

Cite this chapter

• Stephan Bergamin 3 &
• Markus Braun 4  

Part of the book series: Management for Professionals ((MANAGPROF))

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Chapters 1 and 2 have identified the key factors of integration management in M&A projects and delivered our practical guidelines for performance transformation. In Chap. 3, dormakaba’s CEO reveals how the global player in solution and services for secure access to buildings and rooms implements integration and tackles management issues, and finally alludes to critical success factors and pitfalls during its merger processes.

This chapter features Bergamin and Braun’s second case study of a global merger: LafargeHolcim, the world’s largest producer of building materials. An interview with the head of strategy at LafargeHolcim reveals the risks involved in a “merger of equals”, a subject of discussion in the media, not just recently. This case study highlights the importance and urgency of appointing the right management team and then align it to oversee all integration efforts. It also discloses how to deal with antitrust issues in a global merger.

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Bilanz (2015, March 18), also see NZZ (2016, August 6).

Bilanz (2015, July 29).

Bilanz (2016, 25–26, p. 22ff).

Bilanz (2016, March 17).

Bilanz (2016, 25–26, p. 24).

Bilanz (2016, 25–26, p. 27). Neue Zürcher Zeitung, “Ohne Namen geht es kaum” (English: “No name, no gain”), (2016, August 5).

Handelszeitung (2015, July 15).

Bilanz (2016, 25–26, p. 27).

Also see: Ulrike Grein, “Marke hilft bei Integration”, in: Handelszeitung, (2017, January 19, p. 41).

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Bergamin, S., Braun, M. (2018). Global Merger LafargeHolcim : Interview and Case Study. In: Mergers and Acquisitions. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-60504-3_4

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Merger & Acquisition Tax Domain - Frequently Asked Technical Interview Questions

     average ctc: 8 to 13 lpa (approx.),     technical questions :.

• Slump sale amendments also prior litigation due to which amendment was made
• Vodafone case and the amendment therefore
• Budget amendments
• Amalgamation and demerger as per Income Tax Act.
• NRI taxation - Concept of POEM. Treatment of b/f losses and depreciation, fees for
• Technical services, royalty treatment,
• Implications on sale of shares
• Double taxation relief and why it is brought?
• Buyback, reduction in share capital
• Corporate tax rates- surcharges

• B/F  Merging with Capital gains
• Where are amalgamation and demerger defined in the act
• Taxability of subsidy received by company form CG or SG
• Explain special rates for manufacturing company

• Computation of book profits
• Recent Supreme court rulings
• LLP vs Company from a taxability perspective
• Equalization levy and its applicability on the sale of goods and services by NR in India
• Timeline for the issue of notice u/s 143(2)
• Taxability of gift of shares
• Provisions of Section 94B
• Advanced ruling changes made by Finance Act 2021
• Advantages of Faceless Assessment and your view about same.

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