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This is a very big question, with many steps and lots of variation, but let's try a high level overview. You can break the process down into the following general steps:Initiating the transactionNegotiating the transactionExecuting the transactionIntegrating the acquisitionInitiating the transactionThere are several separate routes that can initiate an acquisition, either formally or informally.Formally, a company can engage an investment banker to 'run a process'. The banker (this is typically a team from an investment banking firm, rather than just one person) meets with the the company's board and management, and develops a pitch book showcasing the reasons why the company would be valuable to an acquirer. The banker the develops a list of prospects; larger companies that might conceivably be interested in buying their client. They then call all the prospects (typically the corporate development, M&A, or venture group of the company) to see if they nibble. Ones who are curious are then sent a 'teaser', typically a one or two page presentation laying out at a high level the story of the company. If there's interest after seeing the teaser, the prospect signs a Non Disclosure Agreement, and then is sent the full pitch book. If there's interest after seeing the book, the investment banker then begins to reel in the prospect by introducing the management team, providing additional information, and so forth, with the goal of getting the prospect to offer a term sheet to acquire the company.Investment bankers can also work the other direction, representing a larger company that is in the market to acquire a particular capacity, technology, customer base, or even a specific company. In this case the bankers research the target industry, find likely candidates, present them to their client, and then try to negotiate the sale. At this point, the target company would typically engage their own banker to help with the negotiations.Some of the biggest deals, however, happen informally. The CEOs of the two companies might meet at a conference or industry event, or might know each other from working together. For example, Apple and Beats had a very long and friendly history before doing their deal; and in the far past, Apple had a long history with both of the potential companies they were considering acquiring for their operating system: Jean Louis Gassee's Be, and Steve Jobs' NeXT). One CEO might suggest to the other the idea of acquisition, and they might even shake hands on the spot (rare, but it happens.) M&A deals that originate from the top tend to be done more quickly, with less hassle and at higher numbers, than do ones that come from the bottom as the result of a banking process.Negotiating the transactionEven if both parties want to do the deal, this part of the process can't help but be adversarial, as the acquirer wants to pay a low price, and the target wants to get a high price. The ideal situation for a company looking to sell itself is to have its banker run a quick, efficient, parallel process that results in more than one potential acquirer delivering term sheets at the same time. This results in a competitive situation, where the banker tries to leverage the competing interests to get the highest price for their client. Because this is a market transaction, the two sides will each calculate what they think the price should be, and then they negotiate it out. Where it ends up depends on how important each side feels the deal is, and what their other options are. There is no "official" or "standard" valuation for the acquisition. Alternatively, if the impetus for the deal is a strategic one at a very high level, the CEOs of the two companies may negotiate directly with each other.In addition to the absolute price being paid in the acquisition, there are many other terms to be negotiated, including cash vs. stock, how many executives are expected to stay with company and for how long and in what roles at what salaries, how much of the purchase price will be 'held back' to cover contingent liabilities and unforeseen issues, how long a lock-up there might be on sales of stock (if it is a stock transaction), and so forth. The bigger the companies involved, the more complex the negotiations.The investment bankers who market and negotiate these transactions get paid truly insane amounts of money. I know of more than a few deals in which the investment bankers for a small company walked away from the deal making significantly more money than the original investors in the company being acquired! Their fees usually start in the low millions of dollars for a transaction, and go up from there. But if a company has no choice but to sell, or a company really, really needs to buy another company, they'll all suck it up and pay the bankers.Executing the transactionOnce the decision has been made to finalize the acquisition and the parties have signed off on the major terms of the deal, the lawyers then come into the picture. There is a LOT of legal work to be done when one company acquires another, much more than you might expect. This includes exhaustive due diligence of every facet of the target's history, operation and finances, checking every single contract—from office leases to employee agreements—and double and triple checking everything the company has ever done. Keep in mind that after the deal is completed, the big company will own everything there is about the smaller one, both good and bad.Legal fees for an acquisition are also ridiculously high. While not as insane and 'fairness-challenged' as the banking fees, it is inconceivable that even a simple acquisition of a young startup wouldn't cost each company many tens of thousands of dollars for each of their lawyers. If the company is one with an actual operating history, the legal work will quickly move into the hundreds of thousands of dollars, and for the kinds of major acquisitions you read about in the newspapers, it would not be uncommon at all to see legal fees in the millions (or many millions) of dollars for each side.It is during this phase that both sides need to figure out what to do with the management and employees of the target. Sometimes the whole company will be brought in and kept as a stand-alone operating unit, but much more frequently the target will be absorbed into the bigger company. That means certain roles are superfluous (often the CFO of the target, for example, who is critical in making the deal happen, but of no use to the acquirer afterwards), or a small sales team being absorbed into a company with a much larger, established sales operation. In a world of real politik, it often comes down to a question of who has what power. For example, if the CEO of the target is critical to the operation and the primary reason for the acquisition (can we say "Jimmy Iovine at Beats"), then the CEO has a much greater say in what happens than he or she might have on a purely contractual/legal basis. In a case like that, there are some very interesting and complicated dynamics at play among the acquiring company, the CEO, and the non-CEO shareholders of the target.Integrating the acquisitionOnce the deal has been done, the acquirer is in control of everything, and now has to fold in the target. This can go smoothly, but often is problematic. Cultures might be different between the two companies; the stand-alone goals of the acquired company might have to be substantially changed in light of the strategy of the buyer; and managers who were big fish in a small pond might suddenly find themselves small fish in a big ocean.Depending on the reasons for the acquisition, the target company might be kept as a stand-alone, integrated as a division, or simply disbanded and dispersed within the acquirer (if, for example, it was the personnel, intellectual property, customers, or other assets that were the important factor.) In most—but not all—cases, the CEO of the acquired company will be expected to stay on with new owner for one or two years following the sale. To make sure that happens, their part of the sales proceeds may be locked up for some or part of that time, or they may earn large bonuses if they stay. They would certainly have strong non-competition/non-poaching language in their agreements.During the post-sale period, the shareholders of the selling company will typically engage a 'shareholders' representative', a company that will act on their behalf in dealing with the acquirer post-acquisition, to manage the amount of the purchase price that was 'held back' to cover potential problems. Depending on the deal, the holdback might be for a fixed period of time (say, two years), or it might be layered. At such point as the time period expires, if there haven't been any claims on the funds, then they get distributed to the sellers as well.Finally, it is typical that the minute the former CEO's two-year transition contract has expired, he or she will leave the acquirer and start up another company, thus continuing the innovation cycle.Note: This was written from the perspective of an investor who has been on both the buying and selling sides of acquisitions, but who has not yet been acquired himself. I would be interested to hear the perspective on this from someone like Jason M. Lemkin, who has bought, sold, and been acquired!

From Walter Russell Mead's Special Providence:American politics is like a large sheet of paper covered with millions of tiny iron filings. It seems to me that many of these filings line up in interesting patterns, patterns that lead me to hypothesize the existence of four powerful magnets lying under the paper. But not all of the filings fall into neatly patterned lines. Some of them are outside the effective power of my hypothetical magnets; some of the filings are under the influence of more than one magnet. Some have become magnetized themselves and formed little clumps that exercise their own influence on the surrounding space. Some lie where the competing forces of different magnets cancel each other out. And then, because my filings are only a metaphor and we are actually talking about people and political groups rather than inert metal, some of the objects on paper ignore the magnets hypothetical or otherwise, and get up and walk around on their own.From George Kennan's American Diplomacy, about the United States' entrance into World War I:I sometimes wonder whether... a democracy is not uncomfortably similar to one of those prehistoric monsters with a body as long as this room and a brain the size of a pin: he lies there in his comfortable primeval mud and pays little attention to his environment; he is slow to wrath -- in fact, you practically have to whack his tail off to make him aware that his interests are being disturbed; but, once he grasps this, he lays about him with such blind determination that he not only destroys his adversary but largely wrecks his native habitat. You wonder whether it would not have been wiser for him to have taken a little more interest in what was going on at an earlier date and to have seen whether he could not have prevented some of these situations from arising instead of proceeding from an undiscriminating indifference to a holy wrath equally undiscriminating.

To my knowledge there were no US citizens of Japanese descent who were convicted of espionage during WWII.But this is not because none of them were spying for Japan.Rather, there were no trials because the US was trying to keep its greatest weapon a secret.No, that weapon was not the atomic bomb, which would not be developed and fielded until 1945. Rather, it was…MAGIC. “MAGIC” was the code word for the summary reports produced by the highest level of American crytanalysis and codebreaking. This effort began in earnest when US Navy spooks and translators first broke a significant portion of the Imperial Japanese Navy’s JN-25 cipher and related codes in 1940, with another significant breakthrough in 1941.JN-25 Fact SheetWar of Secrets: Cryptology in WWIIThe most notable success produced as a direct result of this American signals intelligence was the Battle of Midway, which was probably the single most decisive encounter in the entire Pacific War. Certainly it was the one that finally stopped the onrushing Japanese juggernaut, which had been running wild for nearly seven months ever since Pearl Harbor, in its tracks.US Navy Aircraft Carrier USS Yorktown (CV-5) Under Attack by Imperial Japanese Navy Bombers During the Battle of Midway, 4 June - 7 June 1942. Yorktown Was Lost During the Battle, But the USN Won an Overwhelming Tactical and Strategic Victory, Sinking Four Japanese Aircraft Carriers and Two Heavy Cruisers. Midway Was Largely the Product of US Navy Codebreaking.How Did the U.S. Break Japanese Military Codes Before the Battle of Midway?But prior to the war, MAGIC had revealed another vitally important piece of information: Japanese officials were caught red handed in several transmissions during which the mobilization of Japanese-Americans for espionage was discussed in detail. In addition, literally hundreds of MAGIC intercepts contained intelligence (spy) reports obtained from surveillance of targets in the US, though the identities of the agents were usually not provided. Nominally “neutral” Spain subsequently ran a wide-ranging spy network in North America with German and Japanese input and logistical support, and it is known that there was also considerable sympathy for the Axis cause in South America—where future Argentine leader Juan Peron was also involved in espionage aimed at the United States. But again this came later, in 1942–43, after the intelligence intercepts described immediately above.A Declassified MAGIC Intercept of a Spanish Espionage Report Regarding an Allied Convoy Spotted as it Sailed Past Gibraltar During WWII. The Report Was Sent From Lisbon, Portugal, to a Japanese Intelligence Operative in Berlin, Germany. I Took This Photo Myself in Person at the US National Archives in Suitland, MD, in 2012.Further, according to a May, 1983 article in the New York Times:“A cable from the Tokyo Government to its Washington embassy, dated Jan. 30, 1941, asked the embassy and Japanese consulates to arrange for ''utilization of our 'second generations' and our resident nationals.'' But it added, in parentheses, ''in view of the fact that if there is any slip in this phase, our people in the U.S. will be subjected to considerable persecution, the utmost caution must be exercised.''On May 9, 1941, the Los Angeles consulate sent Tokyo a message marked ''strictly secret'' that seemed to assert that cooperation was being obtained from some ethnic Japanese.The cable said strong efforts were being made to recruit white and black agents ''through Japanese persons whom we can trust completely.''''We have already established contacts with absolutely reliable Japanese in the San Pedro and San Diego area, who will keep a close watch on all shipments of airplanes and other war materials, and report the amounts and destinations of such shipments,'' the message said. ''We shall maintain connection with our second generations who are in the army, to keep us informed of various developments in the army. We also have connections with our second generations working in airplane plants for intelligence purposes.''A cable from the Seattle consulate dated May 11 told Tokyo that intelligence would be collected on United States naval ships in the Bremerton, Wash., Naval shipyard; on mercantile shipping; on aircraft manufacturing, and on troop and ship movements.It added, ''For the future we have made arrangements to collect intelligence from second-generation Japanese draftees on matters dealing with the troops as well as troop speech and behavior.''”1941 CABLES BOASTED OF JAPANESE-AMERICAN SPYINGWilliam Pellas's answer to Did the Japanese know that atomic bombs were being built?Japanese Intelligence Successes in World War IIhttps://fas.org/irp/ops/ci/docs/ci2/2ch1_a.htm— link goes to the Federation of American Scientists pages containing the book, Counterintelligence in World War II, edited by Frank J. Rafalko.Japanese Intelligence in World War IIThe NYT piece was written about three months after the Commission on Wartime Relocation and Internment of Civilians issued its first report agitating for reparations to be made to surviving Japanese Americans who had been sent to the wartime camps following an Executive Order from President Franklin Roosevelt. The MAGIC intercepts were not seen by the members of the Commission, nor was Roosevelt’s Assistant Secretary for War, John J. McCloy, initially consulted or allowed to speak before the Commission, despite his publicly stated fervent desire to do so. Eventually McCloy did appear before the Commission to testify, which he described as follows:"From my personal appearance... I believe its conduct was a horrendous affront to our tradition for fair and objective hearings... Whenever I sought in the slightest degree to justify the action of the United States which was ordered by President Roosevelt, my testimony was met with hisses and boos [from the spectators]... Others had similar experiences."Among the others was Karl Bendetsen, the military officer in charge of the initial evacuation of Japanese Americans from their homes, who said that the interruptions from spectators attending the hearings before the Commission made it impossible for him to present his complete testimony. He later commented,"I knew it would be fruitless. Every commissioner had made up his mind before he was appointed”.Note that the vast majority of MAGIC documents were completely unknown to anyone outside the highest circles of military and government intelligence until the first round of declassifications began in 1978. Even then, most remained guarded in utmost secrecy until 1995—50 years after the end of the Second World War.David Lowman, who was previously the special assistant to the director of the National Security Agency, was personally responsible for the declassification and subsequent publication of some of the MAGIC documents. In the Times piece, he is quoted as saying:''Anyone reading this flow of messages during 1941 could easily conclude that thousands of resident Japanese were being organized into subversive organizations…Today we know that the Japanese Government misjudged the loyalty of Japanese Americans completely. But at that time no one knew for certain.''However, it seems that he was toeing the politically correct line at the time, because later in life he became quite outspoken about the threat to US security posed by some Japanese Americans (and also by Japanese nationals living in the US and its overseas territories) during WWII. So much so, in fact, that he wrote a book, MAGIC: The Untold Story of U.S. Intelligence and the Evacuation of Japanese Residents from the West Coast during World War II, in which he argued vociferously that the internment camps were justified given what the US knew because of its above top secret codebreaking. Note that Lowman’s book was not published until after his death.The Untold Story of U — link goes to David Murphey’s review of Lowman’s book. (The quotes from Bendetsen and McCloy were taken from Lowman’s account. See below.)The Cover of David Lowman’s Posthumously Published Book Detailing US Signals Intelligence and Codebreaking That Documented the Determined Effort by Japan to Utilize Japanese Americans for Espionage During WWII.Among Lowman’s biggest complaints was that both federal and California state government money was (and still is) being spent to perpetuate the narrative of the Japanese Americans as completely innocent and the victims of fearmongering and racism. Murphey summarizes:"California presently appropriates millions of dollars in support of the ‘official' history of Japanese evacuation." Such continued funding of a skewed telling of history by federal and state governments and by tax-exempt organizations, all propelled by politics and ideology, exacerbates a problem that in lesser forms has long bedeviled serious scholars. When prior generations, for example, have enshrined specific and often highly partisan perceptions in monuments, cemeteries, and public commemorations of all kinds, they have promoted a certain "received history." That version has then become the mythology of the age that has followed.It doesn’t take long, either on this site or nearly anywhere else in the United States today, to discover that this narrative has taken root and is accepted without question by the vast majority of Americans. The internment camps and the atomic bombings of Hiroshima and Nagasaki are held up as incontrovertible proof of the moral depravity of the people then running the country—and as indisputable justification for hatred of them and their descendants in the present day. Fortunately the declassification of the MAGIC documents provides real incontrovertible proof that this narrative is at least largely false and badly incomplete.Why Truman Dropped the Bombhttp://dwightmurphey-collectedwritings.info/published/pub38.htm — link goes to Dwight Murphey’s investigative essay, “THE RELOCATION OF THE JAPANESE-AMERICANS DURING WORLD WAR II”.Internment Archives — Link goes to the section “MAGIC: The Untold Story” on the Internment Archives website.Internment Archives— Link goes to the article, A NATIONAL DISGRACE:The Story of the Japanese Evacuation From the West Coast During WW II,Based on Contemporary Evidence Not Racial Demagoguery. By Lee Allen, Lt.Col. U. S. Army (Ret.) with help from William J. Hopwood, Cmdr. U.S.N.R. (Ret.)Internment Archives— Link goes to the article, “Critique of the Smithsonian Institution's Exhibit: "A More Perfect Union: Japanese Americans and the U.S. Constitution”, by Lee Allen and Sam Allen.William Pellas's answer to Were the Japanese internment camps justified?William Pellas's answer to Is there any way to justify the forcible internment of Japanese Americans during WWII?William Pellas's answer to Why is FDR considered a great leader when he is responsible for thousands of Asian-Americans being sent to internment camps?American Military Bases, Equipment, Soldiers, and Sailors Under Attack During the Japanese Air Raid on Pearl Harbor, Hawaii, 7 December 1941. The Assault Was Aided Greatly By Information Gathered From Espionage by Both Japanese Military Personnel and Japanese Americans Living in Hawaii.In the end, no Japanese Americans were charged with spying, treason, or fifth column activities as a result of being discovered through MAGIC, and as far as I know there were no legal or court proceedings to that effect—at least not publicly. But that was not because none of them were guilty. It was because, as Richard Frank writes, “By the summer of 1945, Allied radio intelligence was breaking into a million messages a month from the Japanese Imperial Army alone, and many thousands from the Imperial Navy and Japanese diplomats.” This intelligence was by far America’s greatest and most important advantage over its Japanese adversaries in the death struggle that was the Pacific War. It was an advantage, and a secret, that had to be protected at all costs, even to the point of accepting blame from postwar academic leftists and activists for crimes that were either nothing of the sort, or at minimum were far less than they have been made out to be ever since the 1960s.