M&A Cases

This lesson teaches how to evaluate an acquisition using clear strategic and economic logic without turning the case into a finance modeling exercise.

Why This Matters

M&A cases test whether you can think about strategic fit, value creation, and deal risk in a structured way.

Interviewers want to see whether you can:

• explain why a deal makes sense
• identify synergies and risks
• think commercially without relying on heavy valuation mechanics

The Case Pattern

An acquisition is attractive only if:

• the target fits the client’s strategy
• the combined business can create additional value
• the deal can be executed at acceptable risk

In interview cases, this usually means evaluating:

• strategic rationale
• target attractiveness
• synergies
• risks and implementation

What the Interviewer Is Testing

In an M&A case, do not default to saying the target is attractive because it is growing.

The real question is whether the deal creates more value for this buyer than the target creates on its own.

How to Approach It

1. Clarify the deal objective

Ask:

• why is the client considering acquisition?
• capabilities, growth, access, cost synergy, or defense?

2. Assess strategic fit

Evaluate:

• product or service adjacency
• customer overlap
• geographic fit
• capability complementarity

3. Assess target attractiveness

Look at:

• growth
• profitability
• competitive position
• quality of revenue

4. Assess synergies

Typical types:

• revenue synergies
• cost synergies
• capability synergies

5. Assess risks

Consider:

• integration difficulty
• cultural mismatch
• channel conflict
• regulatory issues
• overpayment risk

Case Example

Prompt:

"A manufacturer is considering acquiring a distributor."

A strong candidate may explore:

• whether control of distribution improves margin or customer access
• whether there are cross-selling benefits
• whether the manufacturer can integrate the business effectively
• whether the distributor has unique assets or is replaceable

What Strong Candidates Do

A strong candidate:

• starts with the strategic rationale
• looks for deal-specific synergies
• distinguishes value from growth hype
• discusses integration risk explicitly
• makes a practical recommendation with caveats

What Weaker Candidates Tend to Do

A weaker candidate often:

• treats M&A as just "bigger is better"
• confuses a good company with a good acquisition
• mentions synergies vaguely
• ignores integration and execution risk

Common Traps

Mistake 1: Ignoring the buyer-specific angle

A target may be attractive generally but still not make sense for this client.

Mistake 2: Assuming synergies without evidence

Synergies need a mechanism, not just a label.

Mistake 3: Forgetting integration

Many deals fail because the combined business cannot execute.

Practice Prompt

A consumer goods company wants to acquire a fast-growing digital brand. What would determine whether that deal is actually attractive?

Example Approach

"I would evaluate the acquisition through four lenses: strategic fit, target attractiveness, synergies, and risks. First, I’d clarify why the client wants to buy rather than build. Second, I’d assess whether the target strengthens the client’s portfolio, channels, or capabilities. Third, I’d identify specific value creation opportunities such as procurement savings or cross-selling. Finally, I’d assess integration and execution risk before recommending whether the deal creates real incremental value."

What to Remember

• M&A cases are strategy cases with transaction logic, not modeling tests.
• Focus on strategic fit, synergies, and risks.
• A strong target is not automatically a strong acquisition.
• Explain clearly how the deal would create value for this specific client.