Any merger modelling or merger analysis is highly dependant on the nature of the acquisition So if the target we're looking at is private company or a public company, and if what we're buying is the shares or the assets Will all make a big difference on how we account for this and how we then analyse the merger Let's start by looking at an asset acquisition Well in this case, it doesn't actually matter if you're private company or a private company The acquisition is incorporated into the acquires balance sheet like purchase of PP&E So for instance, if I was going to buy some PP&E, my cash would go down, my PP&E would go up Same for inventory, cash would go down, inventory up, same for accounts receivable Cash down, account receivable up etc So we decide the assets that I'm purchasing and my cash or however I'm gonna pay for it, would be the opposite account No new subsidiaries created and because I'm not buying the shares of the company, therefore it's priced based on enterprise value However if I am going to buy the shares, then whether it's a private company or a public company does make a bit of a difference If we're looking at a private company, then that acquired company becomes a subsidiary of the acquirer And it says next, the balance sheet is fully consolidated This means you take the balance sheet of the acquirer and the balance sheet of the target And you put the two together with a few consolidation effects as well The price here, can be based on EV (enterprise value) or it can be on a per share basis When you look at a public company, it is quite similar but the process is now heavily regulated For instance, offers have to be made in a timely manner and then responses have to be made in a timely manner The price is based on a per share basis because we're offering out to public shareholders Target shareholders also receive a controlled premium. And that's the amount between the offer price and the unaffected price So if my offer price was 5 and the unaffected share price was 4, then our shareholders are getting an extra 1 to give up control of the business