A merger runs through eight stages: planning, identifying targets, assessment, valuation, due diligence, negotiation and documentation, closing, and integration. Due diligence is where deals are repriced or abandoned, and it is the stage most often compressed when everyone wants to get the thing done.
Expect three to six months at the fast end, and considerably longer for anything cross-border or regulated. Last updated September 2026.
| Stage | What it decides |
|---|---|
| 1. Planning | Why you are doing this, and by when |
| 2. Identify targets | Who fits the criteria |
| 3. Assess and shortlist | Who is worth approaching |
| 4. Valuation | What it is worth to you |
| 5. Due diligence | Whether the price still holds |
| 6. Negotiation and documents | Terms, warranties and who carries what risk |
| 7. Closing | Completion and regulatory approvals |
| 8. Integration | Whether any value is actually realised |
Start with why. Market entry, talent, capability, consolidation or defence against a competitor. The reason shapes everything downstream, including what a good target looks like.
Then set a realistic timeline. Three to six months is optimistic. Cross-border deals, regulated sectors and anything requiring competition clearance take longer, sometimes much longer. Build in contingency.
The motivations behind deals are covered in the benefits of mergers and acquisitions.
Set criteria before you start looking, so you assess candidates rather than rationalising the first interesting one.
Location. Do they operate where you want to be?
Capability. What do they have that you do not?
Size. A startup, an established SME and a multinational present very different integration problems.
Competitive position. What does acquiring them do to your standing, and whose attention does it attract?
Culture. The most common cause of failed integration, and the hardest to assess from outside.
Sources: industry knowledge, advisers, brokers and direct approach. Initial contact is usually informal rather than a formal letter of intent, which comes later once there is mutual interest.
Score candidates against your criteria and narrow the list. Scoring is worth doing explicitly, because it makes you weigh factors rather than favour the target you liked first.
Non-disclosure agreements are usually signed at this point, before either side shares anything meaningful.
What the business is worth standing alone, and what it is worth to you specifically once combined.
The second figure is usually higher, and the gap is where negotiation happens. Be disciplined about it. Synergy assumptions are the most common route to overpaying, and they are rarely tested afterwards.
The stage that decides whether the price holds.
Financial. Verify the numbers, the quality of earnings and the working capital position.
Legal. Contracts, litigation, intellectual property ownership, regulatory standing.
Commercial. Customer concentration, contract terms, whether revenue survives a change of control.
Employment. Contracts, liabilities, pension obligations, and whether key people are tied in or free to leave.
Tax. Historic exposure you would inherit.
Employment diligence matters more in cross-border deals than most buyers expect. Termination protections, statutory severance and rules transferring employees automatically on a business transfer all vary by country, and they change what a restructuring will cost. See the role of HR during mergers and acquisitions.
Findings here typically produce one of three outcomes: proceed, reprice, or walk away. Compressing this stage to keep momentum is how buyers inherit problems they later describe as unforeseeable.
Price is rarely the hard part by this stage. Risk allocation is.
The documents cover purchase agreement, warranties and indemnities, disclosure schedules and financing arrangements. Warranties determine who carries the cost of problems that emerge after completion, and negotiating them properly is worth the legal time.
Conditions satisfied, signatures exchanged, consideration transferred.
Two things frequently delay this. Regulatory approval, including competition clearance in larger deals and foreign ownership restrictions in sensitive sectors. And third-party consents, where key contracts contain change of control clauses.
Check foreign ownership limits early. Several countries restrict foreign control in defence, media, energy, telecoms and transport, and discovering that late wastes the diligence spend.
Where the value is realised or lost, and where most deals fail. Failure rates on the measure of increasing market value are commonly cited between 40% and 60%, and the cause is usually integration rather than price.
Monitor the things the deal was justified by rather than general performance. If it was bought for talent, track retention. If for customers, track churn. If for capability, track whether it is actually being used.
The practical side of combining teams is in how to merge two teams into one.
Three things, and the third surprises people.
Regulatory approval may be needed in several jurisdictions, each with its own timeline.
Employment law differs, so a restructuring plan modelled on home-country assumptions may be both unlawful and far more expensive than budgeted.
You may not be able to employ the people you acquire. If the target has staff in countries where you have no legal entity, you cannot put them on payroll, and completion will arrive months before an incorporation could. An Employer of Record employs them from day one, closing a gap that otherwise leaves acquired staff in limbo at exactly the moment they are deciding whether to stay.
The same applies in reverse during a divestiture. We handled this for VMware during its separation from Dell, completing global transfers ahead of schedule.
Country requirements are in CountryPedia.
We employ people on your behalf across 214 countries and territories, including through acquisitions, divestitures and restructures where the legal entity does not yet exist.
Talk to our team about the transaction you are planning.
Three to six months at the fast end, and often considerably longer. Cross-border transactions, regulated sectors and deals requiring competition clearance extend the timeline, sometimes by a year or more.
Verification of what you are buying across financial, legal, commercial, employment and tax dimensions. It determines whether the valuation holds, and it commonly results in repricing or withdrawal.
Due diligence decides whether the deal is sound. Integration decides whether it delivers. Most failures are attributed to integration, though many of those problems were visible during diligence and not acted on.
Integration rather than price. Cultural mismatch, loss of key people and systems that will not combine account for most of it. Estimates commonly put the share of deals failing to increase market value between 40% and 60%.
No. Many countries restrict foreign ownership in sensitive sectors including defence, media, energy, telecoms and transport. Check restrictions before committing to diligence spend.
It depends on jurisdiction. Some countries transfer existing terms automatically on a business transfer; others do not. In cross-border deals the immediate question is whether the acquirer can legally employ them at all, which requires either a local entity or an Employer of Record.