A SYSTEMATIC REVIEW OF THE DUE DILIGENCE STAGE OF MERGERS AND ACQUISITIONS: TOWARDS A CONCEPTUAL FRAMEWORK

Vivek Bhagwan, Sara (Saartjie) Grobbelaar, Wouter Bam

Abstract


 

 Organisations are under constant pressure to grow in the face of increased competition, changing conditions, and increasingly relaxed country and currency regulatory environments. In order to remain a player or an idustry leader, it’s imperative for companies to achieve real growth. Mergers and acquisitions (M&A) are an external mechanism for organisations to achieve growth. There are different stages in the typical M&A transaction. The due diligence stage of a transaction is critical in evaluating whether to proceed with a deal. It provides essential information that is used in setting negotiating parameters, determining bid prices, and providing a basis for integration recommendations. The due diligence process, therefore, should be managed effectively to ensure a higher probability of success for the deal. A systematic literature review was undertaken to establish the key concepts behind due diligence. Due diligence is multidisciplinary in nature, thus a wide range of literature was reviewed to gain a holistic understanding of the process. Concepts identified during the review were then individually examined. Similar concepts were grouped together into a new concept. The outcome of this paper forms the basis of a conceptual framework that captures the key areas of due diligence, the due diligence process and principles.


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DOI: https://doi.org/10.7166/29-3-2061

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Copyright (c) 2018 Vivek Bhagwan, Sara (Saartjie) Grobbelaar, Wouter Bam


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