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Questions related to M&As in general

  • What are M&As?

    M&A is short for "Merger & Acquisition."

  • I would like to consider an M&A. Who should I consult with?

    We recommend consulting with an M&A expert known as a financial advisor (FA).
    On M&A Plus, seller and buyer companies registered as members can view information for FAs throughout Japan and contact them.

  • What role does a financial advisor (FA) play?

    FAs have the kind of high-level expertise required to carry out an M&A, and conduct negotiations on behalf of either the seller or the buyer.

    • 1. M&A strategy development
    • 2. Selection and introduction of candidate companies
    • 3. Support for negotiations with candidate companies etc.
  • What are the differences between the FA model and the intermediary model?

    In the intermediary model, an intermediary is placed between the seller and the buyer. The intermediary receives a commission from both parties, and is mainly responsible for matching them.
    In the FA model, an FA negotiates on behalf of either the seller or the buyer.

  • What types of M&As are there?

    M&A methods include share purchase, asset purchase, corporate divestiture, and merger.
    These vary by the target of acquisition (shares or assets), the type of compensation (cash or shares), etc.

  • How long does an M&A transaction take?

    As transactions are moved forward while taking into account the circumstances of both the selling and buying companies, the time between the start of negotiations and contract conclusion varies by instance. Transactions generally tend to take longer than 6 months.

  • How are financial advisor (FA) commissions incurred?

    Fee structures vary by company, but the following is a list of typical fees:

    • 1. Mobilization fee          : incurred at the "starting point."
    • 2. Milestone fees             : incurred when milestones are achieved.
    • 3. Retainer fees               : incurred every month.
    • 4. Contingent fee   : incurred upon contract conclusion.
  • How high are the contingent fees paid to financial advisors (FAs)?

    These payments are generally calculated with the so-called Lehman formula.
    For more details, please see the "General FA commission structure" page.

  • How does the seller's financial advisor (FA) approach potential buyers?

    Usually the FA compiles a list of candidates, and then checks with the seller whether they want the FA to make a proposal to each candidate. The FA takes great care to prevent identification of the seller before a non-disclosure agreement has been concluded, such as by using anonymous materials in proposal activities.

  • What is due diligence (DD)?

    Due diligence is a survey process in which the buying company employs financial, legal, and other specialists to collect information about and identify issues with the company for sale. This involves the cooperation of the seller and is done in order to reach a final decision on whether to acquire the company being sold.

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Questions related to selling

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Questions related to purchases