What is Mergers and Acquisitions (M&A)?

The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate finance dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.

Usually mergers occur in a consensual (ie. both parties agree) setting where executives from the target company help those from the purchaser in a due diligence process to ensure that the deal is beneficial to both parties.

Corporate mergers may be aimed at reducing market competition, cutting costs, reducing taxes, removing bad management, “empire building” by the acquiring managers, or other purposes.

Such actions are commonly voluntary and involve a stock swap or cash payment to the target.

An acquisition, also known as a takeover, is the buying of one company (the ‘target’) by another. An acquisition may be friendly or hostile. In the former case, the companies cooperate in negotiations; in the latter case, the takeover target is unwilling to be bought or the target’s board has no prior knowledge of the offer.

Acquisition usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger or longer established company and keep its name for the combined entity. This is known as a reverse takeover.

The term demerger is used to indicate a situation where one company splits into two, generating a second company separately listed on a stock exchange.

If I work in M&A what will I be doing?

M&A and investment banking is heavily covered on the City Professional Programme. Stage 2 of the 4-stage programme is a full-day intensive training seminar (in London or online) where a highly experienced finance professional will explain everything you need to know about investment banking and the wider banking and finance sector. This is the quickest way to get an understanding of how all these roles and sectors fit together within the banking and finance sector.

As a junior M&A banker, or analyst, you will spend a lot of time working on documents outlining a bank’s ideas for a particular transaction. Analysts in M&A usually conduct basic research and build the financial models used to price the companies concerned.

One notch up from analysts are associates, who oversee analysts’ work and check their models are correct. Further up the scale are vice-presidents, who survey the work of analysts and associates.

Vice-presidents report to directors and managing directors, who ‘own’ the client relationship (i.e. the main point of client contact).

When a client elicits a positive response, the M&A team see the deal through to completion.

On a day-to-day basis, typical activities in M&A will include:

* Thoroughly researching market conditions and developments

* Identifying new business opportunities

* Carrying out financial modelling, then developing and presenting appropriate financial solutions to clients

* Liaising with the chief executive and chief finance officer of large and small organisations

* Constructing takeover timetables

* Due Diligence on prospectors & financial statements

* Breakfast, Lunch, Dinner Road Shows (Drinking)

How do I get a graduate scheme / internship / entry level job or career in Mergers & Acquisitions?

Obtaining a graduate scheme, internship or entry level role in mergers & acquisitions can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for mergers & acquisitions roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.

Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in mergers & acquisitions.

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