In the media business, content is king! With its portfolio already overflowing with well-known franchise characters, The Walt Disney Company gained control of even more content to compete in the ever-changing media landscape by buying most of 21st Century Fox's assets in December 2017. Through Fox's stake in the Hulu video streaming service, Disney assumed majority control of one of Netflix's main competitors. This massive infusion of content by acquisition is intended to power Disney's planned direct-to-consumer streaming services' strategy. Disney's move continues the rapid industry consolidation with the likes of telecom firms AT&T, Comcast, and Verizon snapping up content and distribution channels at a breakneck pace. Disney and the other traditional media firms are jockeying for position against Netflix, Hulu, Amazon, and other online services that deliver movies and TV programming to homes via streaming, bypassing pay-TV providers.

Part II of this book discusses how business strategies are developed and how management may choose to implement such strategies. M&As should not be viewed as business strategies but rather a means of implementing business strategies. Business strategies define a firm’s vision and long-term objectives and how it expects to achieve these ends. M&As simply represent one means of implementing the business strategy. The firm may choose from a range of alternative implementation strategies, including “going it alone,” partnering, or acquiring another firm. Disney could have executed its streaming strategy by further developing their own content or by partnering with content providers but chose acquisition as a way of more rapidly transforming the firm.

Chapters 4–6 discuss the 10 phases typical of an M&A process. While not all M&As unfold in exactly the same way, the process outlined in this section serves as a roadmap for executing deals. This process is sufficiently flexible to be applicable to alternatives to M&As, such as business alliances. The process for implementing an M&A could be employed by a firm seeking to divest a business, since the selling process involves the identification of potential buyers, approaching such buyers, and negotiating deals.

Chapter 4 focuses on how to develop a business strategy and, if an acquisition is the best way of realizing that strategy, how to develop an acquisition plan. Chapter 5 deals with identifying, making initial contact with the potential target, and developing the necessary legal documents prior to beginning due diligence and formal negotiations. While initial valuations provide a starting point, the actual purchase price is determined during the negotiation period. Chapter 6 discusses the role of preintegration planning and the common obstacles arising during the postclosing integration effort and how to overcome such challenges.