Everything You Need to Know About Mergers and Acquisitions

What are mergers and acquisitions?

Mergers and acquisitions (M&A) refer to the unification of two companies or assets through various financial transactions. Mergers occur when two or more business entities are combined to create a new, joint entity. Acquisitions occur when one entity is taken over by another. Mergers, acquisitions, and divestitures typically encompass numerous types of company restructuring approaches. They can vary based on control, purpose, and other criteria.

There are many reasons for companies to participate in mergers and acquisitions, including:

  • Eliminating competitors through an acquisition
  • Synergy (companies operating in the same space can leverage each other’s strengths)
  • Gaining competitive advantage or a larger market share,
  • Diversifying offerings or services
  • Cutting costs, etc.

Before undergoing a merger or acquisition, companies should first consider an M&A strategy.

What is an M&A strategy?

One of the best ways to grow and gain market share is through a merger or acquisition. However, M&As are also some of the most daunting deals a firm can undertake. Deals of this size and nature can quickly become a bureaucratic nightmare and are often rife with legal hurdles.  Establishing an M&A strategy that focuses on numerous elements, including a fact-based assessment of the current state, analysis and prioritization of potential opportunities, design of the future-state strategy, and an execution roadmap will help your firm through the M&A process.

This comprehensive M&A overview will answer key questions about mergers and acquisitions, including how mergers and acquisitions work and an overview of the different M&A types.

Learn more about how our M&A consultants can support your merger, acquisition or divestiture.


What is the M&A process?

The mergers and acquisitions (M&A) process has many steps and can take anywhere from several weeks to several months to complete. Burnie Group has supported multiple M&As from the initial due diligence phase straight through the post-day 1 phase.

Every merger or acquisition involves 5 key phases:

  1. Due diligence and purchase
  2. Transition and preparation for Day 1
  3. Close and Day 1
  4. Post-Day 1 integration
  5. Business-as-usual

Our team offers flexible and customizable support to organizations through all five phases of an M&A. Find out more about planning a successful merger with our guide to M&A integration plans and our post-merger integration checklists.

What does an M&A look like?

Mergers and acquisitions come in all forms and shapes. In the graphic below, we look at the initial forms that a merger or acquisition can take and provide merger and acquisition examples.


When two or more companies merge, they create a new entity that often benefits from both merged parts (e.g. cost position, broader product/services offering, know-how, market access etc.). Numerous types of mergers are described in detail further below.

Disney and Pixar logos

Before: Disney and Pixar
After: Disney Pixar

Before the merger: Exxon and Mobil After the merger: ExxonMobil

Before: Exxon and Mobil
After: ExxonMobil

An acquisition is an extreme merger case where one company takes over another company incorporating it into its own entity.

Dell and EMC logos

Before: Dell Technologies and EMC

Before: Microsoft and Skype
After: Microsoft

TransCanada and Columbia Pipeline Group

Before: TransCanada and Columbia Pipeline Group
After: TransCanada


Companies often spin-off, creating separate entities out of divisions or subsidiaries. As a result of a spin-off, shares of subsidiaries are distributed back to shareholders as a dividend.

GE and Synchrony logos

Before: GE
After: GE and Synchrony Financial

Siemens and Osram logos

Before: Siemens
After: Siemens and Osram Licht AG

Pfizer and Zoetis logos

Before: Pfizer
After: Pfizer and Zoetis

Onex and Celestica logos

Before: Onex
After: Onex and Celestica

Shaw and Corus logos

Before: Shaw Communications
After: Shaw Communications and Corus Entertainment

A split-off is when after separating a company division or subsidiary, the stakeholders have to choose between keeping shares of the original company or changing some (or all) original shares into shares of the split-off company. As a result of a split-off, shares of subsidiaries are distributed back to shareholders as a dividend.

MetLife and RGA logos

Before: MetLife and RGA
After: MetLife and RGA

Proctor & Gamble and Folgers logos

Before: Procter & Gamble
After: Procter & Gamble and Folgers, subsidiary of Smuckers

eBay and PayPal logos

Before: eBay Inc, and PayPal Holdings, Inc.
After: eBay Inc, and PayPal Holdings, Inc.


A carve-out is a sale of a minority interest to other companies. Typically the seller is compensated through cash inflow or other financial compensation.

Microsoft and Nokia logos

Before: Microsoft Corp. and Nokia Corp.
After: Microsoft Corp. and Nokia Corp

Learn about our mergers and acquisitions consulting services.


Types of mergers and acquisitions

Mergers and acquisitions come in all forms and shapes. They can vary by the control degree of an acquired entity or by its purpose. In addition, the M&A type may often dictate the post-merger integration approach and the degree of integration. Below, we expand further on the different types of mergers and acquisitions.

M&A by control degree

Mergers and acquisitions by control degree

Low-touch ownership

A low-touch ownership acquisition is often used to preserve and grow an existing company that performs very well, particularly if it has an independent brand that carries significant value.

Desjardins and State Farm logos

Before: Desjardins Group and State Farm Canada
After: Desjardins Group

Microsoft and LinkedIn logos

Before: Microsoft Corp. and LinkedIn Corporation
After: Microsoft Corp. and LinkedIn Corporation

Fiat and Ferrari logos

Before: Fiat S.p.A. and Ferrari S.p.A.
After: Fiat S.p.A. and Ferrari S.p.A.

Merger under equals

A merger under equals is when both sides bring considerable assets into the merger from a market, product or service, or capabilities perspective.

Dow and Dupont logos

Before: Dow Chemical Co and DuPont
After: DowDuPont

Before the merger: Exxon and Mobil After the merger: ExxonMobil

Before: Exxon and Mobil
After: ExxonMobil


A takeover is an acquisition that occurs when one organization purchases another. Usually, a large company, the acquirer, buys a smaller company, the target. In this case, most of the functions and often the brand are digested by the purchasing company.

Friendly takeovers

A friendly takeover typically means both the buy-side and sell-side companies are in full agreement about the deal. In this case, the integration process has a much higher chance of success because both sides work together towards the same goal. These integrations are characterized by easy access to data, collaborative work, sharing best practices, and minimal hidden traps. Friendly takeovers can also be mutually beneficial for the acquirer and target company.

HP and Compaq logos

Before: HP Inc. and Compaq Computer Corporation
After: HP Inc.

Vodafone and Mannesmann logos

Before: Vodafone AirTouch PLC and Mannesmann AG
After: Vodafone AirTouch PLC

Hostile takeovers

A hostile takeover means the takeover happens against the will of the company owner or management, and there is a misalignment in the deal terms. In this case, the integration process is more difficult because of limited access to data, especially before Day One, non-collaborative work, potential attrition of key employees if the previous management decides to take them on a new endeavour, and not sharing best practices.

M&A by purpose

Mergers and acquisitions types by purpose

Horizontal merger

A horizontal merger is a merger or acquisition of a company that competes in the same space in the value chain. The main goal is to increase market share, drive economies of scale, or increase presence in other geographies.

Marriott and Sheraton

Before: Marriott International and Starwood Hotels & Resorts Worldwide
After: Marriott International

Vertical merger

A vertical merger is a merger or acquisition of a company so that both companies complement one joint value chain.

Time Warner Cable and Turner logos

Before: Time Warner and Turner Broadcasting System, Inc.
After: Time Warner


A conglomeration is an acquisition of or merger with a company that is active in a partly or entirely different space. These can be mixed or pure conglomerate mergers.

The Walt Disney Company and ABC logos

Before: The Walt Disney Company and Capital Cities/ABC Inc.
After: Disney–ABC Television Group

P&G and Gillette logos

Before: Procter & Gamble Co. and Gillette Co.
After: Procter & Gamble Co.

Microsoft and LinkedIn logos

Before: Microsoft Corp. and LinkedIn Corporation
After: Microsoft Corp. and LinkedIn Corporation

Reverse merger

A reverse merger is an acquisition of a public company via a private company to use the public company as a shell. By merging both companies, the private company becomes public without IPO. A reverse merger is a cheaper and faster alternative to making a company public.

ABC Radio and Citadel Broadcasting Corporation logos

Before: ABC Radio (The Walt Disney Company) and Citadel Broadcasting Corporation After: ABC Radio (The Walt Disney Company)

Aerospatiale and Matra logos

Before: Aérospatiale and Matra
After: Aérospatiale-Matra

Atari and JT Storage logos

Before: Atari Corporation and JTS Inc.
After: JTS Inc.

How our post-merger integration services can help you

Many mergers and acquisitions fail to deliver on expected benefits. Integration of any merger or acquisition should be planned and executed with accuracy and precision to deliver the expected benefits. The heavy lifting of an M&A comes after the deal closes.

Our PMI experts have extensive experience in setting up integration governance, putting in place the structures required for successful integration, working hand-in-hand with your teams to define all elements of the target state in detail, and executing this plan. Simultaneously, we will make sure that you deliver on estimated benefits and extract the value of your M&A deal.

About the author

Alexey Saltykov

Alexey Saltykov

Practice Leader, Post-Merger Integrations

View Bio

Find out how our M&A specialists can support your mergers and acquisitions.