M&A is an abbreviation for Mergers & Acquisitions. It's an umbrella term for everything concerning businesses buying, selling, or combining with each other.

Short answer: M&A covers two main types of transactions: a merger, where two businesses combine into one, and an acquisition, where one business or investor buys another business or part of it. In practice, M&A is used as a broad term for the whole field around business transactions — including ordinary business sales.

Merger

In a merger, two (or more) businesses are combined into one new or existing legal entity. The owners of the merged companies typically end up as co-owners of the new, combined business. Read more about mergers of businesses.

Acquisition

In an acquisition, one party (another business, an investor, or a private equity fund) buys all or part of a business. The seller typically exits wholly or partly, while the buyer takes over control. Most business sales — including most listings on virksomhedssalg.dk — are, in that sense, "acquisitions". See acquiring a business: asset purchase or share purchase.

Who uses the term M&A?

In Denmark, ordinary owner-managers rarely talk about "M&A" — they say "I'm selling my business" or "I want to buy a business". Advisors, accountants, lawyers, private equity funds and corporate finance departments, on the other hand, use the term consistently, because it covers the whole professional field regardless of whether it's a small or large company, a merger or an acquisition.

Key terms in M&A

Some of the terms you'll typically encounter in an M&A process:

  • Due diligence — the buyer's investigation of the business before the deal
  • LOI (Letter of Intent) — a letter of intent to do a deal
  • SPA (Share/Asset Purchase Agreement) — the purchase agreement itself
  • Signing and closing — signature and completion of the deal
  • Enterprise value and equity value — two ways of calculating a business's value

See the full overview in our M&A glossary, or move on to the M&A process from start to closing to see how they fit together in practice.

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