How Long Does It Take for an American Company to Complete an Acquisition?

The process of an American company completing an acquisition can vary significantly depending on several factors, including the complexity of the deal, regulatory requirements, and the parties involved. Generally speaking, the timeline for an acquisition can range from a few months to over a year. To better understand this process, it's essential to break down the key stages and considerations that influence the duration.

One of the first steps in an acquisition is the negotiation phase, where both parties discuss terms and conditions. This stage can be relatively quick if both sides have clear objectives and a mutual understanding of the deal's value. However, if there are disagreements or complications, negotiations may take longer. For instance, in some high-profile deals, such as when tech giant Microsoft acquired Nuance Communications in 2024, the negotiation phase lasted several months as both companies worked out the details of the transaction.

Once the terms are agreed upon, the next step involves due diligence. During this period, the acquiring company thoroughly examines the target company's financial health, legal standing, and operational capabilities. This step is critical to ensure that the acquisition aligns with the buyer's strategic goals and doesn't pose unexpected risks. The due diligence process can take anywhere from a few weeks to a couple of months, depending on the size and complexity of the target company. In the case of larger acquisitions, like Amazon's purchase of Whole Foods Market in 2017, due diligence was extensive, involving multiple teams to assess various aspects of the business.

After due diligence, the parties typically enter into a definitive agreement, which outlines the final terms of the acquisition. This document must then be reviewed by legal teams to ensure compliance with relevant laws and regulations. Regulatory approval is another crucial factor that can extend the timeline. In industries like healthcare, telecommunications, or finance, transactions often require clearance from government agencies to ensure they do not violate antitrust or other regulations. For example, when Pfizer acquired Array BioPharma in 2024, the deal faced scrutiny from antitrust authorities, which delayed the completion until all necessary approvals were granted.

The actual closing of the acquisition marks the final stage, where ownership transfers and funds are exchanged. This process can be relatively straightforward or involve additional complexities, especially if there are post-closing adjustments or contingencies. Once the deal is closed, the acquiring company typically integrates the new entity into its operations, a process that can continue well beyond the initial closing date.

In recent news, the acquisition of MGM Resorts International by MGM Growth Properties LLC in 2024 provides an interesting case study. The transaction was completed within approximately six months, thanks to efficient negotiations and regulatory approvals. This timeline highlights how streamlined processes can expedite an acquisition, particularly when both parties are well-prepared and aligned on their objectives.

Overall, the time required to complete an acquisition in the U.S. depends heavily on the specific circumstances of the deal. While some transactions can be wrapped up relatively quickly, others may face delays due to legal, financial, or regulatory challenges. Understanding these variables is essential for companies looking to navigate the complex landscape of corporate acquisitions successfully.