what is m&a

Mergers and acquisitions (M&A) refer to business transactions in which the ownership of companies, business organizations, or their operating units are transferred to or consolidated with another company or business organization. M&A can allow enterprises to grow or downsize, and change the nature of their business or competitive position. Technically, a merger is the legal consolidation of two business entities into one, whereas an acquisition occurs when one entity takes ownership of another entitys share capital, equity interests, or assets. M&A activities can include a company purchasing and absorbing another company outright, merging with it to create a new company, acquiring some or all of its major assets, making a tender offer for its stock, or staging a hostile takeover. The terms "mergers" and "acquisitions" are often used interchangeably, but they differ in meaning. M&A deals vary in terms of the complexity and sophistication of the legal operation implemented to carry them out. Due diligence is a crucial stage in M&A transactions, where the financial and legal advisors of the buyer make a comprehensive revision of the financial and legal matters of the target company or assets that will be purchased.