M&A Interview Questions

Mergers & Acquisitions (M&A) interviews can be especially challenging, as they test a candidate’s ability to handle sophisticated financial deals under pressure. Interviewers look for candidates who can think critically, demonstrate attention to detail, and display resilience, all while showing a strong collaborative spirit and excellent communication. Here we will focus on how an M&A interview is typically structured and the questions to be prepared to answer.

What is an Interviewer Looking For?

In M&A interviews, employers often seek candidates with a solid foundation in financial knowledge, analytical thinking, problem-solving, resilience, teamwork, leadership, adaptability, strong cultural alignment, and excellent communication. A direct background in finance or relevant internships is helpful but not mandatory. Demonstrating genuine enthusiasm for the field, through thorough preparation and thoughtful responses, can be just as impactful.

Interview Structure Awareness

M&A interviews are generally organized into several key segments, typically covering personal background, resume-specific questions, behavioral questions, and technical questions. Tailoring preparation to each of these areas can lead to more confident and polished answers, ensuring readiness for every stage of the interview process. Recognizing how the conversation usually unfolds helps candidates respond more effectively.

Personal Story

Time required to prepare: 5-10 hours. Utilize this time to self-reflect and brainstorm, draft the narrative, and tailor it for investment banking. Refine the narrative to ensure clarity and coherence.

Interviews typically begin with either of following questions:

1. Tell me about yourself
2. Could you share some highlights about yourself?
3. Walk me through your resume
4. Can you discuss your background in more detail?
5. What brings you to us today?

Though phrased differently, these questions all pursue the same goal: uncovering a candidate’s personal and distinct story. It’s essential to have a clear, well-structured narrative rather than appearing to improvise on the spot. Present that background confidently, highlighting the most engaging courses and explaining their direct relevance to investment banking. Include internships and hands-on projects that involved live deals or banking-related case studies, illustrating genuine interest in the field. Emphasize any organized activities or events that reflect leadership capabilities. Ultimately, blend these elements into a cohesive story, showing how a career in investment banking aligns with broader ambitions.

Resume Related Questions

Time required to prepare: 5-10 hours. Utilize this time to review and annotate the resume in detail, rehearse concise explanations for each role or project, and prepare clear examples that highlight relevant skills and experiences.

Following the introduction, the interviewer may proceed with a series of questions related to the resume. It’s vital to have complete familiarity with every detail on that document, right down to the smallest point.

Expected question for those without an investment banking internship or related projects:

1. Can you highlight the key lessons or skills you gained from your university courses that are most relevant to investment banking?
2. What was your contribution to the ‘XYZ’ project?
3. I see you have interned in the strategy division of a leading e-commerce company. How do you justify its current valuation? Why do you think its net debt is zero when interest rates are so low? Are you aware of any significant M&A deals in this industry?
4. Share an example of a situation where you had to communicate complex information to a non-technical audience.
5. Tell me about a project where you faced tight deadlines. How did you manage your time?
6. Can you describe a scenario where you worked effectively in a team?

Expected question for those an investment banking internship or related projects:

1. Can you describe a financial model you’ve developed during your internship?
2. What strategies did you employ to ensure the accuracy and reliability of the data used in those models?
3. Can you discuss a time when you had to adjust your valuation approach due to unexpected market changes or new information?
4. Which methods did you use for company valuation in your previous projects?
5. What was the most challenging aspect of building a financial model or conducting a valuation, and how did you overcome it?
6. Could you explain how you calculated Beta to arrive at the Weighted Average Cost of Capital (WACC) in any of your projects?
7. Can you share key players and trends in the industries you’ve worked in?

Non-Technical / Behavioural Questions

Time required to prepare: 5-10 hours. Utlize this time to reflect on past experiences, draft structured responses to common behavioral questions below, and refine delivery to ensure clear and confident communication.

Expected questions:

1. What do you want to join this role?
2. Why do you want to join this particular bank?
3. What is the main role of a merger and acquisition analyst?
4. What qualities does an M&A analyst need to succeed?
5. How do you handle stress?
6. How do you handle setbacks or failures, and what have you learned from them?
7. Tell me a situation where you encountered a complex problem and how did you solve it?
8. How do you prioritize and manage multiple tasks simultaneously?
9. Describe an experience where you had to adapt to change quickly.
10. What is your daily routine as a merger and acquisition analyst?
11. What strategies and mindset are required for this role?
12. What is the biggest challenge in this job?
13. How do you stay motivated in your work?
14. Why do you feel you are best suited for this role?
15. What is your greatest achievement?

Technical Questions

Time required to prepare: It depends on the level of familiarity with the underlying concepts. Those already well-versed in these topics might be ready in under a week, whereas gaining a deep understanding and crafting concise answers could take up to eight weeks.

The good news is that all the answers to these questions are available in the download section. For more detail, consider accessing FELIX – FE’s learning platform packed with useful videos and exercises.

• Get the same training as new hires at the top investment banks
• Access various M&A topic with 11 playlists and over 8 hours of content

Market

1. What is your current assessment of the economic landscape?
2. How does your economic outlook influence your investment strategies?
3. Can you discuss any potential risks or opportunities you see in the current economy?
4. How do you foresee inflation affecting investment decisions?
5. Given the current economic conditions, what industries or sectors do you believe will thrive or face challenges?
6. Which industry do you follow? Have you tracked any major M&A activity in that industry recently?
7. Pitch a stock.

M&A Fundamentals, Types of Integrations & Synergies

8. What is the difference between a merger and an acquisition?
9. What are some potential reasons that a company might acquire another company?
10. Are M&As beneficial?
11. What is a successful acquisition?
12. Why do M&As fail?
13. What are synergies in M&A?
14. Which type of synergies are most likely to be realized: revenue synergies or cost synergies?
15. How are synergies used in merger models?
16. How do you calculate break-even synergies in an M&A deal?
17. What is the difference between vertical integration and horizontal integration?
18. What is the difference between forward integration and backward integration?
19. What is a conglomerate merger?
20. What is a congeneric merger?
21. What is a reverse merger? Provide examples.
22. What type of material is found in an M&A pitchbook?
23. What is ‘football field’ in M&A pitchbook?
24. What is ‘hostile takeover’ and how it can be prevented?
25. What is the role of investment banks in M&A transactions?
26. Can you provide an example of a high-profile M&A transaction and analyze its outcomes?

Deal Structures & Premiums

27. What does purchase consideration refer to in M&A?
28. What is the general rule of thumb for determining the accretion/dilution impact for all-stock transactions?
29. Is it preferable to finance a deal using debt or stock?
30. Which deal structure is more likely to result in a higher valuation: an all-cash or all-stock deal?
31. What happens when a buyer pays more for a seller in an all-stock deal, but the market value drops later?
32. What is purchase price allocation (PPA)?
33. Why are goodwill and other intangibles created in an acquisition?
34. What’s the difference between goodwill and other intangible assets?
35. What is the control premium in M&A?
36. What are net identifiable assets?
37. Which type of buyer is more likely to offer a higher purchase premium: a strategic buyer or a financial buyer? Why?
38. What are the three common sale process structures for the seller in M&A?
39. Contrast asset sales vs. stock sales vs. 338(h)(10) election.
40. What are the most important terms in an M&A deal?

Merger Modelling & Accretion/Dilution

41. Walk me through a basic merger model.
42. What does accretion/dilution analysis tell you about an M&A transaction?
43. Why would an acquisition be dilutive?
44. Why would an acquisition be accretive?
45. A company with a higher P/E acquires one with a lower P/E, is this accretive or dilutive?
46. What is the role of acquisition debt in accretion/dilution?
47. How does an accretion and dilution model differ for a private buyer?

Valuation & Financial Analysis:

48. What are the different ways to value a firm?
49. How do you determine the purchase price for a target company?
50. What happens if a company overpays for another company? Can you give recent examples?
51. What is Enterprise Value (EV)? How do you calculate it?
52. Why is cash & cash equivalent deducted from EV?
53. Can a company have negative enterprise value?
54. Define Minority Interest. State the reason for its inclusion in EV
55. In the case of a takeover, should you consider the equity or enterprise value?
56. What is Discounted Cash Flow Analysis (DCF)?
57. What is Trading comparables method of valuation?
58. What is Transaction comparables method of valuation?
59. What discount rates do you use in M&A transactions?
60. What is WACC?
61. How would you calculate WACC for a private firm?
62. Between two identical companies, one with zero debt and another with 50% debt, which will have higher WACC?
63. What is beta, and how do you calculate it?
64. What’s the difference between asset beta and equity beta?
65. Can you provide an example of a sector or company with a negative beta?
66. What is the difference between FCFF and FCFE?
67. If I give you the FCFF, how would you calculate FCFE?
68. What are the industry specific ratios and comparables?
69. Why is EBITDA the preferred metric for calculating leverage ratios?
70. If I issue $100mm of debt and use that to buy new machinery for $50mm, walk me through what happens in the financial statements when the company first buys the machinery and in year 1. Assume 5% annual interest rate on debt, no principal pay down for the 1st year, straight-line depreciation, useful life of 5 years, and no residual value.
71. How would you value a conglomerate like Alphabet?
72. What is conglomerate discount?
73. Why Walmart, which has 2 times the revenue of Apple, has 1/6th of its market capitalization?

Advanced M&A Accounting & Tax:

74. How do you account for transaction costs, financing fees, and miscellaneous expenses in a merger model?
75. What are deferred tax liabilities (DTLs) and deferred tax assets (DTAs) in M&A deals?
76. How do you account for DTL and DTA in an asset purchase?
77. How do you account for DTL in forward projections in a merger model?
78. What are unfunded pension liabilities? Why do they form a part of debt?
79. What are the examples of recurring and non-recurring expenses?
80. Define excess cash. How does a company differentiate between normal cash & excess cash?

Download the guide answering these technical questions.

Wrap Up the Interview with Thoughtful Questions

It’s common for interviews to end with a chance to ask questions, and making the most of this opportunity can highlight genuine enthusiasm and provide valuable insights. Below are a few suggestions that can lead to a deeper conversation:

• you describe the structure of the team I’d be joining or walk me through a typical day in this position?
• Which challenges would someone in this role need to be prepared for?
• What do you find most rewarding about working here?
• How does the company envision its growth over the next few years, and what might a typical career path look like?
• Could you clarify the steps involved in moving forward with this hiring process?

Asking these kinds of questions shows active interest in the role and helps determine whether the position aligns with personal career goals. Tailoring questions to the earlier conversation in the interview can further demonstrate genuine engagement.

Additional Resources

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Investment Banking Recruitment: The Ultimate Guide

Investment Banking Courses

Investment Banking Interview Skills Course

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