Not at all; when two companies wish to collaborate in some way to accomplish similar objectives, there is a wide range of corporate transaction structures to consider—M&A is just one option. The precise structure that might work best in any given situation may depend on a wide variety of factors. Instead of a merger or acquisition, the companies might be able to achieve their goals through a joint venture or even less formal relationship.

Factors to consider include: How much influence does one party want over the other’s corporate decision making, and how receptive is the other side to that request? How much capital does each party have and does each party need? How committed is each party to the collaboration? How closely integrated should the collaboration be, and must that integration be permanent?

These structures might be as informal as a trading relationship, in which the buyer and seller periodically enter into one-off purchase-and-sale transactions of goods or services. In some circumstances, the parties might be capable of achieving their strategic objectives merely through a contractual relationship. or some form of licensing agreement, which dictates precisely how the licensee can and cannot use the rights granted by the licensor. Alternatively, the contemplated business collaboration may involve ownership via equity—whether in the form of a passive minority stake, a minority stake with a formal operating alliance, or a joint venture of some kind.

A full-out merger or acquisition involving the constituent companies is the most extreme form of business collaboration—typically reserved for situations in which the buyer seeks a high degree of influence over the other party, such as fully integrating the target into the acquirer’s business. However, integration is not a requirement of M&A.

There are plenty of examples in which an acquirer assumes full ownership of the target and operates it as a stand-alone. We referred to such acquirers earlier as “financial” as opposed to “strategic.”