The private deal process in mergers and acquisitions

The purpose of this study is to review the nascent literature devoted to the private component of the takeover process. Numerous important contributions have opened the black box of merger negotiations using unique data, such as the merger background in mandated filings and survey of M&A practitioners and contributed to our understanding of the takeover process. This article is organized in three parts: (i) we first focus on the drivers of deal initiation and acquirer-target matching; (ii) then, we examine the role played by internal M&A teams and external advisors in executing the takeover process; (iii) and finally, we explore the drivers of the sales method. The insights gleaned from this literature review can be summarized as follows: targets are not passive during the initiation phase; the takeover process is more competitive than what early studies have suggested and most of the competition takes place privately; acquisitive firms often rely on internal M&A teams to implement the process.