Published on August 12, 2025 | Reading time: 2 minutes
Stages of M&A transactions
Understanding the M&A process is critical for any successful transaction. I guide founders through each stage with clear priorities and realistic expectations. From preparation to integration, every phase builds on the last. Success comes from knowing the process and being ready at every step.
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To successfully participate in an M&A Deal, it is essential to understand the process and its underlying stages of M&A transactions. Below, we offer a compact summary of the key stages and their significance in the field of mergers & acquisitions.
The meaning of M&A
M&A stands for “Mergers & Acquisitions” – a term referring to transactions in which one company is either acquired by another business or investor, or the two companies merge to form a single entity.
Management of M&A transactions
A company sale or merger is often complex and requires collaboration among various experts, including lawyers, tax advisors, auditors, IT specialists, and M&A consultants. Usually, the process is led by an M&A advisor, while larger deals are managed by specialized teams from M&A boutiques or investment banks.
An M&A transaction typically consists of five phases:
Understanding the Stages of M&A Transactions
1. Preparation
The M&A advisor analyzed the company to be sold, creates an information memorandum, and sets up a data room for interested parties. A company valuation is conducted to determine a realistic sale price. Together with the seller, the potential buyer list (longlist and shortlist) is created, and the timeline is established.
2. Due Diligence
Interested buyers receive access to the data room and perform a comprehensive review of the company covering financial, legal, tax, and commercial areas. Depending on the industry, additional due diligence may be required, such as IT or environmental. After completion, buyers typically submit a non-binding offer.
3. Contract negotiations
If an offer is positively evaluated, negotiations on the purchase agreement begin, including the purchase price and detailed provisions on warranties and terms of transfer. The final agreement is often negotiated by lawyers on both sides.
4. Execution phase
Once the agreement is signed (“signing”), all contractual agreements are implemented. Approval from authorities such as competition regulators is often required. The transfer of ownership (“closing”) marks the completion of the transaction.
5. Post-closing phase
Following closing, the acquired company is integrated. Depending on the buyer’s strategy – whether a financial investor or strategic investor – the company remain operationally independent or be merged into existing structures. This phase can last from several months up to multiple years.
Conclusion
Each stage of an M&A transaction builds on the last and requires careful attention to detail. From initial preparation to successful integration, understanding the process is key to managing expectations and avoiding unnecessary risks. Founders who take the time to prepare and seek experienced guidance are far more likely to achieve a successful outcome. M&A is not just about the deal itself – it’s about navigating a structured process with clarity, discipline, and foresight.