A more thorough explanation:

Mergers and acquisitions (M&A) is a legal practice that involves combining two or more companies through various legal operations such as mergers, purchase of assets, tender offers, hostile takeovers, and more. M&A deals are used in different industries to help businesses grow strategically.

Here are some examples of how M&A deals work:

• Due diligence: Before the M&A deal, the buyer's financial and legal advisors review the target company's financial and legal matters to identify any potential issues that could affect the transaction.
• The contract: The legal advisors of the parties prepare and negotiate a contract that allocates the risks between the buyer and the seller based on the findings made in the due diligence phase. The contract may be in the form of a stock purchase agreement or an asset purchase agreement.
• The closing: The contract provides a detailed description of the actions both the buyer and the seller will have to perform to close the M&A deal. Each closing is different depending on the specifics of the transaction.
• Post-closing: Even after the M&A deal has been closed, the parties may still have to comply with post-closing obligations or actions, such as non-compete or non-solicitation obligations.

For example, if a large tech company wants to expand its services, it may acquire a smaller tech company that specializes in a particular area. The larger company's financial and legal advisors will review the smaller company's financial and legal matters to ensure there are no issues that could affect the transaction. They will then negotiate a contract that outlines the terms of the acquisition, including any post-closing obligations. Once the deal is closed, the larger company will integrate the smaller company's services into its own to expand its offerings.