Stages of M&a

Stages of the Mergers and Acquisitions Process

My company, named SMBC Nikko Securities, is located in Tokyo Japan which has employee of 7,600 people, net asset of 474,835 billion yen, 109 branches in Japan, 5 branches in overseas, and over more than 90 years of the history. Our company became wholly owned subsidiary company of SMBC, Sumitomo Mitsui Banking Corporation, since 2007 and before then Nikko was cooperated with Citi Bank for 8 years. Nikko, although it is a subsidiary company of SMBC, is independent from SMBC and creating own business models as a securities company. Nikko is divided into three departments: Retail, Wholesale, and Product & Research. I am employed at Whole Sale department and this is where investment banking is located.

At investment banking department, our main job is to achieve M&A. As the name Mergers and Acquisitions refers, the main job of the agent of M&A is to consolidate companies. A merger is a combination of two companies to form a new company, while an acquisition is a purchase of a company by another company to create new company. But the process follows some concrete steps for both the mergers and acquisitions.

1. Compile a target list – Unless having a list of suitable sellers or buyers, a company cannot start a business.

2. Contact the targets – Making a phone call and discuss about the target’s interest. In this discussion, an agent needs to estimate the level of target’s interest.

3. Send/Receive a teaser – A teaser is the document sent by sellers to the buyer and is usually anonymous, so that buyer will not know which specific company is sending document. In this document, sender gives just enough information to make buyers want to learn more such as: the product, customers, problems that the company solves, financial document, and etc.

4. Sign a confidentiality agreement - Both sides agree to keep the deal discussions and materials confidential.

5. Send/review the confidential...