SUNConferences, 29th Annual Conference of SAIIE

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A SYSTEMATIC REVIEW OF THE DUE DILIGENCE STAGE OF MERGERS AND ACQUISITIONS TOWARDS A CONCEPTUAL FRAMEWORK
Vivek Bhagwan, Sara (Saartjie) Grobbelaar

Last modified: 2018-10-17

Abstract


Organisations are under constant pressure to grow in the face of increased competition, changing conditions, shrinking geographical boundaries and increasingly relaxed country and currency regulatory environments. In order to remain a player or an idustry leader, it is imperitave for companies to achieve real growth. Mergers and acquisitions (M&A) is an external mechanism for organisations to achieve real growth. There are different stages in the typical M&A transaction. The due diligence stage of a transaction is critical in evaluating whether or not to proceed with a deal. It further provides essential information that is used in seting negotiating parameters, determining bid prices and providing a basis for intitial integration reccomendations. The due diligence process therefore should be managed effectively as in doing so, a higher probability of success is secured for the deal.

A systematic literature review was undertaken to establish the key concepts behind due diligence. The due diligence process is multidisciplinary in nature thus a wide range of literature was reviewed in order to gain a hollistic understanding of due diligence processes. Concepts identified during the review process were then individually examined. Concepts which had similarities were grouped together into one new concept. The outcome of this paper forms the basis of a conceptual framework which captures the key areas of due diligence, the due diligence process  as well as due diligence principles.