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Best Books on M&A to Complete Deals Successfully

Best Books on M&A to Complete Deals Successfully
Best Books on M&A to Complete Deals Successfully

Over 500,000 M&A deals have been closed globally since 2010 which makes M&A a trendy topic today. Yet, it’s very complicated and complex. Managers and executives need to know countless details and nuances to make informed decisions and complete the transactions successfully.

To help them out, financial professionals, entrepreneurs, lawyers, and other specialists wrote numerous books on M&A that provide detailed overviews of the entire process of M&A. The best ones are described below.

5 best books about mergers and acquisitions

Let’s first start with a short overview of the books that might come in handy for both beginners and experts who want to broaden their knowledge:

  • Valuation: Measuring and Managing the Value of Companies. Author: McKinsey & Company Inc, Tim Koller, and Marc Goedhart. The authors provide exhaustive information on the principles of value creation. Best for executives, investors, managers, and board members. Beginners might find information difficult to comprehend.
  • The Art of M&A: A Merger Acquisition Buyout Guide. Author: Stanley Foster Reed, Alexandra Lajoux, and H. Peter Nesvold. The book delivers the latest insights on key aspects of winning M&A transactions. Best for specialists and non-specialists in M&A.
  • Barbarians at the Gate: The Fall of RJR Nabisco. Author: Bryan Burrough and John Helyar. The book represents a business narrative about one of the biggest deals ever. Best for readers that want less technical material on leveraged buyouts.
  • Agile M&A: Proven Techniques to Close Deals Faster and Maximize Value. Author: Kison Patel. The author focuses on inefficiencies that M&A participants face and provides techniques to cope with them. Best for M&A professionals and consultants with background knowledge in M&A.
  • Creating Value from Mergers and Acquisitions: The Challenges. Author: Sudi Sudarsanam. The book describes the five stages of M&A deals and highlights the differences between European and American markets. Best for students of MBA courses in finance, business strategy, or corporate governance or anyone who wants to deepen their knowledge in M&A.

Now let’s have a look at more detailed overviews of the books and learn what each of them offers to readers.

1. Valuation: Measuring and Managing the Value of Companies

by McKinsey & Company Inc, Tim Koller, and Marc Goedhart

“The guiding principle of business value creation is a refreshingly simple construct: companies that grow and earn a return on capital that exceeds their cost of capital create value”. 

The book is considered the best on the topic of valuation and is a must for executives, investors, managers, board members, and everyone who wants to understand what drives corporate value. 

Written by senior consultants at the global management consulting firm, the book focuses on principles of value creation and explores valuation techniques such as discounted cash flow analysis.

The authors also give advice on how to:

  • Enhance shareholder and company value
  • Estimate the importance of business strategies to facilitate decision-making
  • Assess major transactions like an acquisition or corporate restructuring
  • Minimize risk by planning a capital structure

In general, readers describe the book as an excellent reference guide in case of any questions about valuation. However, those who aren’t yet familiar with fundamental accounting principles and financial statement analysis might find the information a little hard to comprehend.

2. The Art of M&A: A Merger Acquisition Buyout Guide

by Stanley Foster Reed, Alexandra Lajoux, and H. Peter Nesvold

“The best M&A strategies are based on an analysis of an organization’s strengths and weaknesses, as well as opportunities and threats.”

This is one of the best books on mergers and acquisitions, suitable for both specialists and non-specialists in M&A. It can also be of special importance to those who are planning a buyout.

Its goal is to familiarize readers with the basics of friendly negotiated acquisition and its financial, accounting, and legal aspects. The content is advanced and sophisticated and yet the authors try to explain key aspects as plainly as possible. 

The book covers the entire mergers and acquisitions process which includes:

  • Various strategies
  • Valuation
  • Financial modeling
  • Due diligence
  • Deal structuring
  • Closing
  • Post-merger integration

Readers admit that The Art of M&A isn’t just a theory-laden textbook. This is a step-by-step guide that helps avoid many pitfalls and complete a big deal successfully. This is crucial as, according to the Harvard Business Review report, up to 90% of acquisitions fail. Among the main reasons are unclear business strategy and performance metrics that aren’t aligned with value.

3. Barbarians at the Gate: The Fall of RJR Nabisco

by Bryan Burrough and John Helyar

“Strongly urge you to very carefully consider your actions. Our business relationship, including our recent discussions, presumes a code of conduct that should not include either ethical  lapses or breaches of contractual relations.”

A №1 New York Times best-selling book and one of the best business narratives, Barbarians at the Gate tells the story of one of the biggest Wall Street deals of all time — the leveraged buyout of the RJR Nabisco Corporation.

Written in 1989, the book is still relevant 33 years later because it touches upon hot topics like:

  • The financial services industry not taking client interests into account and charging large fees
  • The CEOs taking large paychecks for little real return
  • Shareholders being powerless

The book is great for those looking for a less technical read on the leveraged buyout. Still, less experienced readers find the content complex because:

  • The financing isn’t well explained. There are terms that aren’t clear and have to be searched for.
  • There are too many characters. It’s difficult to remember who was on which side of the deal.

4. Agile M&A: Proven Techniques to Close Deals Faster and Maximize Value

by Kison Patel

“From the marketing phase through due diligence and post-close integration process, maintaining team alignment, facilitating collaboration, and ensuring that the team remains focused on the larger goals presents a considerable challenge.”

In the case of proper conduction, M&A is one of the quickest ways to help a company gain a competitive advantage, achieve maximum value, and increase market share. One of the best M&A books, Agile M&A, describes how to accomplish that. 

The author gives advice on different stages of M&A:

  1. Initiation. The description of the pre-deal legal framework and due diligence. 
  2. Planning. Tips on how to execute more efficient, collaborative, and successful M&A transactions.
  3. Monitoring and control. Explanations of how to align Agile practices, systems, and processes with M&A needs.
  4. Implementation. Proven strategies that help with integration issues. 

The book dwells on the importance of rethinking an outdated M&A process into a new one by implementing agile principles. Kison Patel is sure that by adopting this new Agile approach, more deals can be completed much more efficiently.

In general, this is a must-read for M&A professionals and anyone working in consulting. However, it might be more difficult to comprehend for those who are just starting in M&A and don’t have enough experience to relate to the scenarios described in the book.

5. Creating Value from Mergers and Acquisitions: The Challenges

by Sudi Sudarsanam

“One of the most puzzling aspects of the merger phenomenon is the widespread perception that mergers and acquisitions do not create value for the stakeholders and, in fact, destroy value.”

This acquisitions book is an invaluable resource of knowledge about M&A. It analyzes and compares the M&A process in the two most active markets in the world — America and Europe.

The author describes a five-stage model of M&A and highlights the need to understand the interconnected nature of these stages. 

The main aspects Sudi Sudarsanam focuses on are:

  • Challenges M&A participants face while trying to create shareholder value
  • M&A risks and how to mitigate them
  • Steps to undertake to increase M&A’s chances of success

This is essential reading for anyone who requires a broad understanding of the various issues in M&A planning and execution. However, it’d be easier for comprehension for those who are already in the midst of an M&A transaction rather than beginners.

What else to read on mergers and acquisitions

Here are more examples of merger and acquisition books that can help to broaden your understanding of M&A nature.

  • Mergers & Acquisitions from A to Z: Strategic and Practical Guidance for Buyers and Sellers. Author: Andrew J. Sherman. The book describes everything about M&A transactions, from structuring documentation to analyzing projected financial gain. It also includes checklists and sample documents. Best for both beginners and experienced specialists in M&A.
  • Mergers and Acquisitions for Dummies. Author: Bill Snow. The book describes the M&A process in plain language, explains industry-specific terms, and provides techniques for valuation. Best for beginners in M&A.
  • Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions. Author: Joshua Rosenbaum and Joshua Pearl Pearl. The book’s authors concentrate on primary valuation methodologies that Wall Street financial specialists use nowadays. Best for anyone who needs to broaden knowledge in investment banking.
  • Mergers, Acquisitions, and Corporate Restructurings. Author: Patrick A. Gaughan. The book provides basic information on M&A and corporate restructuring and has plenty of updated research to back up all the stated facts. Best for executives and financial managers that want to learn how to benefit from corporate restructuring.
  • Mergers & Acquisitions Integration Handbook: Helping Companies Realize the Full Value of Acquisition. Author: Scott C. Whitaker. The author offers guidance for managing a successful M&A transaction and prepares M&A participants for different integration challenges. Best for anyone planning to implement an M&A strategy to expand the business.
  • Mergers and Acquisitions, An Insider’s Guide to the Purchase and Sale of Middle Market Business Interests. Author: Roberts, Dennis J. The book focuses on M&A in the middle market, where the majority of transactions take place. The author gives advice on how to find buyers and how to run a business while preparing it for sale. Best for owners and managers of middle market businesses, investment bankers, and consultants.
  • The M&A Process: A Practical Guide for the Business Lawyer. Author: Committee on Negotiated Acquisitions. The book is a detailed guide that focuses on the acquisition of both publicly and privately held businesses. Best for all M&A practitioners of all levels of experience.

Summary

M&A is a complicated subject, but understanding it is crucial as it’s one of the fastest ways for businesses to grow and expand.

The good news is that no matter how much you currently know about M&A, there are dozens of books that can help deepen your knowledge.

Merger and acquisitions books described above are considered the best on the topic. Some of them are great to start learning from scratch and others may serve as refreshes, so all readers can find something suitable for them.

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