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Robust, MECE but simple M&A Framework

Case Interview Framework M&A MECE
Letzte Aktivität am 19. Jan. 2017
2 Antworten
21,5 T. Views
Anonym A fragte am 16. Jan. 2017

Hi!

Ive read Victor Cheng's "Case Interview Secrets" and listened to LOMS. Generally not much material on M&A case-frameworks. He simply states to take the business situations framework and apply it to the meger case, first analyzing the acquiror, then the target, and then finally the combined group. At some point in the case interview secrets book, he mentions that perhaps the Business situations could be combined with the profitability or something like that. This seems like a very long approach/vague structure to present the interviewer with! My question to you therefore; anyone has good, simple approach for an M&A case? (preferably if you have passed rounds). Applied to if they would simply ask you "Company A wants to buy Company B, should they do so? Read the article on this site but felt like that too was pretty long, I also have a finance background so I sense that a merger case will come.

Many thank you!

(editiert)

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Peter
Experte
antwortete am 19. Jan. 2017
Ex-Bain & Company Case Team Leader * Placed 40+ MBB candidates as Partner in Europe's leading top-tier Consulting recruiting firm

You never want to use a pre-thought out framework in a case, so I would throw out any notions of having anything ready. What you'll find is the case will be laid out in a way which means that you don't have to ask questions about certain areas, but which will invite you to dig into more.

In terms of M&A, it's generally useful to think about:
The market - Is it the same, is it different? Customers/ geographies? Is it an attractive market? (large, profitable, growing?)
The target company - Is it successful? (Growing, profitable, strong positions, unique capabilities, etc.)
The purchasing company - Should they be making acquisitions right now? Can they afford them? Is this the right market to be making an acquisition is? Is this the best company?
Synergies - What is the increase in value from the merger? Cost synergies (HQs, procurement, etc.) revenue synergies (customers, marketing, etc.) and what about from how the company is currently being run?

It's very unlikely you'll ever get a case which asks you to cover all of the above, as it's simply too much and won't allow you to get into the detail. More likely it will be a deep dive into one area - for example, answering the question of whether the market is attractive in more detail.

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Anonym B antwortete am 17. Jan. 2017

I haven’t read Victor Cheng, so I can’t help you on his approach, but for me the approach on this website works. (although I ignored the intro part, since the four questions to structure confused me). I proceed as suggested: analyse the client’s company, analyse target industry (general info and using porter 5 forces), anayse target company (general info, basically SWOT and financial valuation), finally analysing the feasibility of M&A and finishing with conclusion (including risks and how to minimise them). Sometimes I change the order of the steps, depending on how the conversation goes, but I have found that this approach works best as a rough guideline since it fulfills MECE requirement. Of course it is always important to adjust the framework and not blindly stick to it, depending on the case, and how the conversation goes with the interviewer. And not make it too obvious that you use concepts like porter 5 forces etc.

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