Pre-deal Management

The acquisition process is often represented as a step-by-step logical chain of events. Typically, these steps are said to flow from acquisition strategy and objectives, passing through the phases of systematic search and screening, strategic evaluation, financial evaluation, negotiations, purchase, and ultimately integration. This characterization is useful in highlighting different challenges and stages through time. But it has two limitations. Depicting the acquisition process as a chain of sequential and discrete steps neglects the extensive interrelationships between the different stages. Furthermore, acquisitions are usually undertaken within contexts characterized by considerable uncertainty. Discrete stage descriptions of acquisitions overstate the predictability of outcomes, including strategic fit, organization fit, and economic value. These are judged, supposed, anticipated as much as they are objectively found. This chapter considers the management of the inter-related acquisition activities undertaken prior to a merger or acquisition (hereafter, acquisition) deal.