The Role Of Investment Banks In Mergers And Acquisitions

Vinayak Sharma, Army Institute of Law Mohali

Mergers and Acquisitions also referred to as M&A, are a set of business transactions through two separate entities combine to form one. There are various means through which this process is achieved one being mergers (where two entities may merge to become one) or acquisitions (where one entity acquires control of another). For both mergers and acquisitions there are a number of ways through which they can happen, in cases of mergers for example, there are horizontal mergers, vertical mergers, market-extension mergers and etc, in cases of acquisitions, there are stock sale and asset sale. These are acts that are aimed towards accelerating growth, expansion and influencing the industry. The most important aspect in executing such deals is having proper strategies in order to bring maximum profits from these deals.

It becomes easy to refer that in order to fund these transactions there are many intricacies required to be fulfilled this includes the most important factor Funds for these transactions along with other necessities such as due diligence, valuation, deal structuring and etc. And to assist firms in these aspects’ investment banks play a crucial role. Investment Banks are primarily intermediaries that help companies raise capital. When it comes to mergers and acquisitions investment banks play two roles: seller representatives or buyer representative. However, they may also choose to act exclusively as advisors in the procedure as well. The exact work of the Investment Bank differs as to whether they are on the buy side or the sell side.