M&A WATCHING (WEEK 09/09 – 13/09/2024): Steps in executing an M&A transaction

M&A activities are carried out extensively in the financial market and the business market worldwide and in Vietnam. Simply put, M&A is a term that refers to the integration of companies or assets through various types of financial transactions. It involves combining two or more companies to create a new entity (a new legal entity may be established or the old one may be retained depending on the case), usually aiming for synergy to achieve growth.

The term M&A is composed of M (merger) and A (acquisition). M refers to the combination of two or more companies to form a new company, with the consent of the parties involved (a synergy to improve market position); while A refers to a company purchasing shares of another company (friendly – with the consent of the acquired party, or hostile – without the consent of the acquired party) or aiming to buy assets, acquire technology, gain market share, or take ownership of the target company.

There are many forms of carrying out M&A such as acquisitions (friendly or hostile), horizontal mergers, vertical mergers, forming a group of companies/conglomerate merger, etc. Each form of M&A will have different steps and procedures.

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