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This chapter is from the book


In this chapter, we considered the principal reasons companies merge or acquire one another, whether M&As create shareholder value, the size and reasoning behind the presence of premiums, and the typical steps in a merger or an acquisition. We also gave an overview of the mainstream valuation methods.

As mentioned, a sound valuation process starts with a thorough analysis of a company’s historical and forecasted performance. In Chapter 2, “Financial Review and Pro Forma Analysis,” we take a closer look at the important processes of financial review and pro forma analysis. In Chapters 3 and 4, we examine traditional and alternative valuation methods, respectively. In Chapter 5, “Accounting Dilemmas in Valuation Analysis,” we discuss a number of accounting dilemmas that analysts face when valuing companies. In Chapter 6, “Financial Reporting and Tax Considerations for Mergers and Acquisitions,” we investigate the financial reporting and tax considerations associated with M&As. In Chapter 7, “Some Final Thoughts,” we bring closure to the journey.

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