M&A - the Auction Process -

Advantages and Disadvantages and the Key Steps -

Introduction -

Mergers and acquisitions represent a key growth strategy for many corporations. The M&A landscape is becoming increasingly competitive and the balance of power is shifting further in favour of buyers. For attractive businesses, however, sellers may wish to make divestments through an auction process which is designed to elicit competitive bidding among interested parties to facilitate the sale of a business or stake in a company at the highest price and on the best possible terms.

This article seeks to explore the auction process and discusses (1) the differences between a competitive auction and bilateral negotiations, (2) the advantages and disadvantages of a competitive auction and (3) an overview of the key steps in an auction process.