Mergers and Acquisitions is a crucial part of a company's business development strategy. Due to its complexity, choosing this path requires expert knowledge in the field of finance as well as a great ability to withstand stress.
What is Mergers & Acquisitions or M&A?
This activity with a prestigious name, considered as the prerogative of the big investment banks, allows the company to strengthen itself on its own market or on a different sector.
This complex financial operation consists for one or several companies in the purchase of one or several other companies. The operation increases the size of the group and has different objectives by allowing the regrouping of activities, opening access to new markets (in terms of activities, products but also on a geo-strategic scale), acquiring new skills, etc.
There are three types of M&A:
- Horizontal (the company has the same activity as the one it is buying),
- Vertical (the acquired company is part of the production/activity circuit, upstream or downstream of the acquiring company),
- Conglomerate (acquisition of companies from different sectors).
They can also be national or transnational, and involve the total disappearance of the company being sold or, on the contrary, its maintenance in certain measures.
Qualities and skills of the M&A advisor
Intuition, a sense of risk, listening skills and negotiating skills are the characteristics of a good M&A advisor. Like many finance and business professions, this position requires a vision based on a keen sense of figures and a culture of results, but it is also and above all a question of linking the various aspects of a market in order to foresee opportunities. The objective of the M&A consultant is to detect the right development direction while having a perfect knowledge of the situation of potential target companies in the sector or outside the sector, in order to strengthen or enlarge the acquiring company.
The M&A specialist masters, ideally, the different sectors of expertise concerned by M&A operations:
- Professional English
The inherent qualities of the M&A consultant :
- A great economic and stock exchange culture,
- A good political and international culture (geo-strategic)
- A sense of risk,
- Intuitive skills combined with a business mind
- A good sense of contact and pedagogy
- Strong negotiation skills
Which degree to become an M&A consultant?
M&A professionals come from the most reputable Masters and Schools in the field of financial analysis. Business school, engineering school or university, these degrees can be found in different types of institutions. Moreover, the quality of the M&A advisor's work will obviously come from his personality, passion and involvement.
- French University: Masters in Corporate Law and Taxation, Business Law or Banking Law. There is also a specialized Master's degree in the field, the M2 Merger & Acquisitions at Paris-Saclay.
- In business schools: Masters, MS and MBA in finance and auditing.
- In engineering school: financial engineering and analysis and macroeconomics.
Where to work in M&A?
M&A advisors work in the legal and tax departments of large companies, banks or SMEs, as well as investment funds.
In M&A, there are two main types of players. They have the resources in terms of knowledge, skills and personnel, and are able to carry out the operation successfully:
The investment banks: the large investment banks are mandated by the groups in order to study the M&A and mainly to evaluate the transferred company.
Audit firms: audit firms are also mandated to study the companies involved in an M&A. They carry out many types of financial analysis and evaluate the prospects and risks.
These specialized structures are assisted by other actors with complementary actions: law firms specialized in corporate law, communication agencies, lobbyists.
Salary and opportunities in the M&A field
The gross monthly salary of a beginner M&A consultant is around 4,000 euros per month. It can, of course, largely evolve according to the experience and the structure that employs him/her, as well as the operations conducted.
Hardly impacted by the crisis of 2008, this activity has recovered with dynamism for several years, and the high-end profiles it recruits easily find opportunities for evolution and diversification (M&A is a busy activity, as for trading, it is not uncommon to see specialists turn to other aspects of their profession after several years). M&A consultants' careers can evolve into many areas of banking and corporate consulting on an international scale: transaction service, financial advisory, investment banking.