Mergers and Acquisitions (M&A) – Adopting a Strategic Approach

Mergers and acquisitions specialists assist businesses which are considering making changes to their corporate structure by joining forces with another company in some way.

Mergers and acquisitions specialists assist businesses which are considering making changes to their corporate structure by joining forces with another company in some way. By combining expertise in corporate finance, corporate strategy and business management, M&A experts provide companies with expert advice regarding company restructure and the potential impact of a merger or acquisition.

Although the terms ‘merger’ and ‘acquisition’ are often used synonymously, they are in fact very different. A merger involves two companies joining together to become one company, whilst an acquisition generally involves one company buying out or taking over another company. The company which has been taken over or ‘acquired’ then ceases to exist. There are various strategic reasons for companies to consider making an acquisition and a successful takeover can help companies achieve their strategic objectives as well as increase cost effectiveness within the business.

However, the process of merging with another company or acquiring a company is extremely complex. In addition to the legal ramifications, companies must be aware of the potential tax implications as well as ensuring the terms of the deal benefit both parties. Often companies rely on lawyers and M&A specialists to negotiate on their behalf in order to obtain the best possible deal. By seeking the advice of mergers and acquisitions experts, businesses can obtain specialist advice and ensure they are aware of all the options available to them. In addition to providing information regarding the possible options available, merger and acquisition specialists can provide forecasts highlighting the potential effects of changes to the company structure. This can assist company management teams in deciding which option is most suitable and whether to go ahead with any proposed changes the company structure.

Although many companies consider mergers and acquisitions as opportunities for growth, they can provide a viable business solution for companies attempting to downsize or companies which are looking for an effective exit strategy. By divesting company assets, the company can reduce costs and streamline its operation leading to an increase in profitability. If companies have an underperforming department or subdivision, they can rely on mergers and acquisitions experts to help them dispose of the asset effectively and in accordance with their overall business strategy.

By helping companies prepare for potential mergers and acquisitions, corporate finance specialists can help maximise the sale value of a firm or asset and obtain the best terms of sale for their client. Negotiating terms for a merger or acquisition can be a long and laborious process so companies often rely on M&A specialists to guide them through the process and ensure they meet compliance requirements as well as ensuring they achieve the best possible terms. Although complex, a merger or acquisition can be a rapid way for companies to achieve their objectives and increase company growth. The complexity of a merger or acquisition, in addition to the impact on the business if the deal goes ahead, means that companies should obtain specialist advice from M&A experts prior to closing a deal. By engaging with merger and acquisition specialists, companies can ensure they are acting in according with their business strategy, complying with the relevant regulations and acting in the best interest of the company, its shareholders, investors and staff.

Baker Tilly is an independent firm of chartered accountants and business advisers, positioned as one of the leading mid-tier accountancy firms. Baker Tilly specialises in merger and acquisition advice to quoted companies, private shareholders, management teams and private equity houses.

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