A Framework for Validating an M&A Deal Thesis

This paper organizes a variety of existing strategy theories, typologies and models into a framework that can be used to analyze and validate the investment thesis for a proposed acquisition by a strategic or corporate buyer. One dimension of the framework utilizes the classical models and theories of strategy. A second dimension applies models that were developed to understand M&A value creation. The third perspective examines if the acquirer is the best parent for the target firm. A fourth approach is to utilize tools that “stress test” the investment thesis based on common causes of M&A failure.