Why does a company decide to merge with or acquire another company? What is its motivation, and how does it select a target? Conversely, what factors lead a company to consider selling, and how does it maximize its value?

I. The Motive to Buy

Broadly speaking, a company seeks to merge with or acquire another company for either financial or strategic reasons.

A. Financial Buyers

Financial buyers seek to invest in companies to attain a wealth of assets. A prime example of a financial buyer is a...