Demystifying Corporate M&A

This is how my job in an inhouse M&A department looked like

In 2018, I started working in the Corporate Strategy and M&A department of a large German manufacturer. Prior to that, I worked in M&A-related services of a professional service firm.

I am going to provide my view on the following questions: how did your job look like? What do I need to know if I want to transition into Corporate M&A? What can I expect?

Photo by Guilherme Stecanella on Unsplash

The Team

It depends on the firm, but typically, teams are smaller and therefore less hierarchical with a good culture among peers. It is important to bear the word “small” in mind. This means that degrees of freedom as to how to structure a task and ownership is higher. But it also means that there might be less guidance or less “learning on the job”, considering that knowledge and experience are limited to few colleagues, compared to a professional service firm with thousands of experts on similar topics.

Knowledge

Given the smaller size of the team, superiors are “far away” from teaching basic stuff like Excel or Powerpoint and simply too busy answering questions of the board or investors on strategic topics. From my experience, this is also the reason why many corporates prefer to hire young professionals who went through these topics already. So, technical knowledge is a must.

Being in corporate development also requires solid industry knowledge. For example, I spent the first weeks talking to many colleagues and visiting production in order to understand the firm and its processes easier. And I also did a lot of research on the industry and its drivers. Without this knowledge, it would have been difficult for me to evaluate potential targets as to whether or not they would be a good fit for the firm.

Approach

Before transitioning into Corporate M&A, I was doing Financial Due Diligence and Valuation. In general, my job in Corporate M&A required less financial depth and if required, we would typically hire an advisor for a financial review. In addition, the strategic approach was rather focused on the “why”: why should we do this transaction? Why would this firm be a good addition? Why this firm and not its competitor? Why do the current shareholders want to sell? These examples relate to buy-side deals, but for the sell-side, we would ask similar questions to determine the divestment rationale.

That’s it

This is my view and my experience from my time in Corporate M&A. I hope it helps you get a better understanding of the different approaches, especially if you are thinking about transitioning into a related role.

In case if you have any questions, feel free to contact me here or message me at messagefromjan@gmail.com.