Today I'm going to explain to you what M& is, what it consists of and concretely what MNA is in investment banking, which is the job I currently do. I noticed in my close circle that there aren't many people who really know what I do for a living. Many people think that I'm the person you contact when you know when you've blocked your credit card, but not at all, but hey, I understand, in fact it's not a very visible job, few people really know about after-sales service, how it works. It's not a job we see on a daily basis, and unlike market finance, uh, MNA isn't very present in films or series, so the general public has n't been able to get a glimpse of how it works, and that's a shame because M&A impacts our daily lives much more than we imagine, that's why I'm going to explain everything to you in this video, and in a very simple way, you'll be able to understand exactly what M&E is and what M&E is. in investment banking the profession we will divide this video into several levels from level 1 to level 5 and in the first levels I will go over the simplest concepts for example what does m& mean that is for those who are completely new and for those who already know the basics and well you will be able to confirm your knowledge and in any case in the last levels I will go into more detail on the very specific aspects of the profession and the MNA in investment banking and I will give some insights and we start directly with level 1 what is m& so m& is an abbreviation in English which means mergers and acquisition sorry for the English accent and if we translate this into French it means merger and acquisition but so merger acquisition what is it what does it mean well the name is quite explicit companies can perhaps lead in their development to carry out the acquisition of other companies or even to merge or there merge with other companies to create a single large group for example we can cite LVMH the large French luxury group which carried out in 2021 the acquisition of the jeweler tiffanenko for around 13 billion euros and we can also cite the merger between Fnac and Darty to form the Fnac Darty group in 2016 so a small important clarification when we talk about acquisition we can quite easily visualize a large group like LVMH acquiring a smaller company like Tiffany Enko on the other hand for a merger we can ask ourselves ok but how does it happen do the two companies come together is there one that acquires the other it is a little more complicated to visualize but in fact the term merger is a bit of a shortcut there is no merger strictly speaking in an operation between two companies there is always the acquirer and the target so there is always a company that will buy another we speak of a merger in fact when the size of the acquirer and the size of the CBE are roughly equivalent there is no real domination so ultimately the two companies are roughly the same size so we're going to talk about mergers rather than acquisitions that's the basics on the mne or rather merger acquisition let's go directly to level 2 but just before if the content I post interests you don't hesitate to subscribe to like and share the video to give me a little strength it would make me super happy you can also follow me on insta and Tikok where I post much shorter formats but just as [Music] interesting why there are acquisitions what is the point of making acquisitions well I would say that there are two main reasons why companies want to make acquisitions first reason is horizontal growth for a given company in a given sector to increase its market share and its turnover it can be a long and laborious path so the acquisition of a competitor can directly increase market share and turnover and competitiveness much more quickly for example in 2012 there is Facebook which acquired Instagram which was a network social competitor in full swing at the time the second reason well it is vertical growth a company can seek to acquire another one which is higher or lower in the chain of ur I explain for example the company can seek to acquire its supplier or even its distributor a good example will be the Walt Disney group that you all know I suppose well what is Walt Disney Walt Disney is mainly brands brands very well known to the general public and well the Walt Disney group acquired the blockbuster production studios 21st Century Fox you know this is what we see very often before the films it is written in big letters 21st Century Fox and well they are the ones who produce films the idea behind this was in fact to associate the Disney brands with big productions to produce content always linked to the Disney universe but blockbuster content and also Walt Disney acquired American television channels quite well known like ESPN ABC or Fox and with this you see that the group is positioned on the entire value chain they have the brands the very strong brands of Walt Disney they have the production of quite significant media content with 21st Century Fox and they also have enough to broadcast all the films the series the cartoons linked to this with the television channels now you surely see more clearly on the interest of acquisition for the companies so let's go directly to the next level who are the other actors who intervene during the merger and acquisition operations so until now I have spoken to you about acquisition carried out by companies with a strategic goal they wish to develop rather quickly so they will be able to carry out acquisitions here and there but they are not the only actors in such operations there are also institutional investors called investment funds and for whom the strategic aspect is perhaps a little less important the objective of an investment fund will be mainly to achieve good returns on investment the strategic component is not as important as for a traditional company and these investment funds they will carry out the acquisition of companies either entirely or partially with the aim of developing them and then a few years later to resell them with a big capital gain and a good return on investment, for example, in France, the frozen food distribution group Picard has been the subject of numerous acquisitions by investment funds, and the last player in these operations is obviously the investment banks. So, banks don't buy and they don't sell. They will possibly lend money to finance these operations, but above all, they will have the role of financial advisor for companies. So when we talk about MNA in investment banking or mergers and acquisitions in investment banking, we are actually talking about merger and acquisition advice. The bank and the teams will advise companies in their merger and acquisition operations. Why do banks advise on merger and acquisition operations? That's a good question, and to answer it, I'm going to use an analogy that you all know very well: the acquisition of apartments and the use of real estate agents. Imagine that tomorrow you have a little money set aside and you want to buy an apartment, but you don't have the time to do all the necessary research, analyze the market, analyze the price of the apartment. put together the file and so on so you will call on a real estate agency which will take care of everything the agency will find you the apartment it will help you negotiate the price and help you in all your steps also if you want to sell your apartment how you determine the right price how you advertise your apartment and try to find potential buyers you can of course do it yourself but you probably don't have the time for that and not the same expertise as real estate agencies so they take care of everything and in exchange well you will pay them fees so either fixed fees or a percentage on the price of the acquisition or the sale I don't really know how it works but it's something like that and well the mn advice it works the same way but instead of buying and selling apartments you will buy and sell businesses and instead of calling on a real estate agency you will call on an investment bank so of course I have greatly simplified the thing the processes and analyses for the acquisition of a business are much more complex than for those of an apartment and the amounts are also much higher, for example, an apartment will be hundreds of thousands of euros, whereas for a company it will be a few tens of millions of euros, hundreds of millions of euros or even several billion euros, and therefore the fees that the bank will charge are also much higher than for an apartment, which we call the fees. Then you should know that during an acquisition transaction, the buyer will call on a bank to advise them on the purchase, this is called the buyside, and the target will call on a bank to advise them on the sale, this is called the sellside, so the two banks advise both the buyer and the seller, and will actually play the role of intermediary and, being experts in this, they will take care of the entire transaction. They will take care of the commercial, strategic, financial and even legal aspects. Now you know generally what banks do in merger and acquisition transactions. Now let's go into a little more detail with the last [Music] level, here we will try to understand. how does the MNA team of an investment bank support a client in concrete terms what does it do good first of all you have to know that each situation has its specificities and the support is different if the client wishes to buy the company or if the client wishes to sell his company let's take a classic case the advice on the sale of a company so the client wishes to sell his company this is what we call a sellside the bank will first of all have the responsibility of project management of this transaction in other words planning the different stages organizing the workstream supervising everything managing the timing and carrying out the project during a transaction we will often have recourse to other types of advice technical advice legal advice commercial advice who each have their expertise in a very specific area and one of the roles of the MNA team will be precisely to consolidate a little all this work to ensure its proper functioning and present the consolidation to the clients so that they are satisfied also the bank will take care of seeking companies or investors who could be interested in the company that we wish to sell This is what we call the hour, sorry again for my ex for that, the directors of our team will call on their knowledge of the market, their expertise and their relationships in order to obtain a list of investors who would potentially be interested in the company and the bank will be responsible for contacting them and presenting them with this great investment opportunity, but obviously you can't go to an investment fund or a company, no matter what an investor, saying that you have a great opportunity but you have nothing to prove you have nothing to support what you say, no details, no documents that justify it, uh, that's it, it's complicated and that's why the bank will work upstream with the client to prepare all the necessary documents to go see the investors, we call this the preparation phase, a crucial point for investors will be to understand the future strategy of the company, its projections in terms of turnover and profitability and so that too is prepared in advance and that's what will be presented in particular with the business plan or rather what is more commonly called the financial model, so the bank will be responsible for working on a financial model to present all of this in a very simple and very readable way to investors once contacted the investors will show their interest or not and one of the roles of the bank will be to manage all the interactions with its investors this will include signing NDAs it will also include introductory calls to organize and any questions they may have which will need to be answered so it can sometimes be a bit complicated because we have to deal with sometimes 30 or even 50 investors at the same time so managing all the calls all the signing of NDAs all the questions it's a lot of workload and finally in parallel the bank will also prepare regular and frequent meetings with the client presentations also to keep them informed of everything that is happening in the progress of the project and also to be able to steer the project a little bit and make decisions on the next steps to follow and at the very end the interested investors will submit purchase offers and at that time in this phase the role of the Bank will be to support the client for the analysis of the offers the negotiation of the terms of certain offers and also support the client until the signing of the transaction and the closing of the transaction and there you go I hope to have given you a slightly clearer vision of what the mne is in investment banking do not hesitate to tell me in comments if there are other subjects which would interest you and which you would like me to address in the meantime like the video share it subscribe to the channel to give me strength and go check the other videos I put the links in the description Ciao