Due dilligence, M&A

Merger and acquisition
A merger and acquisition differ by the size of the companies. A merger is between same sized companies while a acquisition is about a bigger company acquiring a smaller one. For Michael Porter, during M&A, the significant synergies are gain through human capital.

For employee, an M&A is usually a bad news because is results is head count reduction.

For the investors of the bigger company, it is usually bad news because the stock price will go down and the company will likely not have enough money for dividends.

For the investors of the smaller one, it is a good news because the stock price will increase.

For suppliers, M&A are bad news because it opens the door to renegotiation.

For customers, on the short term, product variety may reduce because the company has to get back its money and will milk its customers. On the long run, if synergies emerge, the customer may have better products for less.