Mergers and Acquisitions, Divestitures and Trade Sales, Strategic Alliances and Joint Ventures (read more about Buy-side and Sell-side M&A)

Acquisitions or mergers are about implementing strategies through the filling of strategic gaps. This may be achieved by implementing a growth strategy, through product and/or geographical diversification, by focusing on core business units or through consolidating manufacturing capacity. Available M&A tools to fill such gaps are e.g., acquisitions or trade sales, joint ventures/strategic alliances and mergers.

A transaction does not represent any stand-alone value. It is only a tool for strategic change, not an objective.

Understanding the links between basic business strategy and the use of M&A is a critical and highly underestiamted domain of knowledge in top management as well as in the M&A industry.

(For more on this key issue, read this main article on business strategy and M&A, or this summarized Linked-In article on Strategy and M&A or this White Paper #2 which is a full version downloadable pdf)

Buy-side Transactions and M&A

For buy-side transactions, managing acquisition risk is critical. Risk comes in three forms: 1) The nature of the acquired entity; 2) The acquisition model – e.g., a merger vs. step-based ownership increase; and 3) The emphasis on post-merger integration. In addition to acquisition risk, the acquisition process itself is risky as you are “one of many buyers.” Therefore, the ability to develop a buyer's advantage is a key factor.

Learn more about buy-side M&A.

Sell-side Transactions and M&A

In contrast to acquisitions, divestitures (also known as trade sales) are driven by creating and maintaining negotiation strength through excellent project management and the optimal use of tactics.

Unlike an “uncertain" acquisition process, a divestiture process is “certain” in the sense that its outcome is determined only by the seller’s own ability to locate motivated buyers and to negotiate acceptable terms.

The below illustration is from White Paper #2, which discusses optimal use of the various M&A strategies and tools:
An overview of strategic M&A options and their characteristics, 
  M&A, M&A strategy, M&A strategies, M&A process, M&A processes, M&A project, M&A projects, 

  acquisition, acquisitions, merger, mergers, merger & acquisition, mergers & acquisitions, merger and acquisition, mergers and acquisitions, 
  merger or acquisition, mergers or acquisitions, 
  strategic alliance, strategic alliances, joint venture, joint ventures, 
  growth strategy, growth strategies, divestiture, divestitures, trade sale, trade sales, spinoff, spinoffs, spin-off, spin-offs, de-merger, de-mergers, 

  M&A in Norway, acquisition in Norway, acquisitions in Norway, merger in Norway, mergers in Norway, 
  merger & acquisition in Norway, mergers & acquisitions in Norway, merger and acquisition in Norway, mergers and acquisitions in Norway, 
  merger or acquisition in Norway, mergers or acquisitions in Norway, 
  strategic alliance in Norway, strategic alliances in Norway, joint venture in Norway, joint ventures in Norway, 
  growth strategy in Norway, growth strategies in Norway, divestiture in Norway, divestitures in Norway, 
  trade sale in Norway, trade sales in Norway, spinoff in Norway, spinoffs in Norway, 
  spin-off in Norway, spin-offs in Norway, de-merger in Norway, de-mergers in Norway, 

  post-merger integration, synergy, synergies, synergy capture, synergies capture, 
  post-merger integration in Norway, synergy in Norway, synergies in Norway, synergy capture in Norway, synergies capture in Norway, 

  advisory, advisory services, consulting, management consulting, financial consulting, M&A consulting, 
  management consultant, financial consultant, M&A consultant, 
  project management, negotiation, negotiation support, 
  advisory in Norway, advisory services in Norway, consulting in Norway, management consulting in Norway, financial consulting in Norway, M&A consulting in Norway, M&A services in Norway, 
  management consultant in Norway, financial consultant in Norway, M&A consultant in Norway, 
  project management in Norway, negotiation in Norway, negotiation support in Norway, 

  company, companies, business, businesses, enterprise, enterprises, firm, firms, 
  company in Norway, companies in Norway, business in Norway, businesses in Norway, enterprise in Norway, enterprises in Norway, firm in Norway, firms in Norway, 

  Norway, Scandinavia, Nordics, Northern Europe
Illustration: The M&A Tool Set of Strategic Options

Therefore, the keys to success in a divestiture are to understand buyer motives and synergies, locate enough buyers and their decision makers, and then negotiate and tactically handle a large enough set of parties to secure the right financial terms.

Learn more about sell-side M&A.

Other Relevant Articles

Also read the separate articles on Strategy and M&A, on Strategic Alliances and Joint Ventures, on Buy-Side M&A, on Sell-Side M&A, on Synergies and Poor Judgment, on Financial vs. Industrial Ownership, and about M&A Process Management especially related to handling non-financial M&A objectives.

See Download Center: White Paper #2: Strategy - and the Proper Use of M&A Tools. A LinkedIn article with a shorter web version of the same white paper is available here; White Paper #5: Buy-Side M&A (mergers and acquisitions); White Paper #6: Sell-Side M&A (divestitures, trade-sales and mergers); or White Paper #7: Should You Choose Financial or Industrial Investors/Owners?..

Facts

Remis AS and Ketil Wig offers financial advisory and consulting services to foreign owners in Norway, handling key priorities related to investments and operational assets. Typical M&A assignments are related to handling acquisitions, mergers, business partner searches (e.g. for strategic alliances or joint venture solutions) or divestitures/trade sales.

  • 100+ executed acquisitions, divestitures/trade-sales and merger/de-merger/joint venture projects. Focus on managing acquisition risk, negotiations, tactics and maximizing value.

  • Business unit size of US$10-250M, with deal sizes up to 2x these levels.