What is Mergers and Acquisitions?
Mergers and acquisitions (M&A) are transactions in which the ownership of companies or their operating units is consolidated. In a merger, two firms combine to form a new entity; in an acquisition, one company purchases another.
How It Works
- Identify a strategic target and value it using DCF, comparables, or precedent transactions.
- Perform legal, tax, and financial due diligence.
- Sign the SPA, close the deal, and integrate the businesses post-close.
Saudi Context
Saudi M&A activity has accelerated under Vision 2030, with PIF-led consolidations and CMA-supervised tender offers on Tadawul. The General Authority for Competition (GAC) reviews deals above thresholds for merger control.
Example
A Saudi telecom acquires a regional ISP for SAR 1.2 billion. Goodwill of SAR 400 million is recognized after fair-valuing the ISP’s net assets at SAR 800 million.