The foundation for any company, which strives for development, is its expansion and growth. There are many ways to expand a business, and one of them is mergers and acquisitions (M&A). Mergers and acquisitions marked the business world of the last century. Since the 1980s, merger waves have become more frequent with an increasing number of mergers. Also, the mergers are becoming international and spreading to all continents of the world. The field of M&A is rightly becoming an increasingly important part of business finance. To avoid entering the merger and acquisition investment unprepared, it is necessary to study the processes and steps in mergers and acquisitions and analyze the target company. One way of valuing a company is the discounted cash flow method. Two examples of mergers and acquisitions of opposite outcomes are observed in this paper and conclusions and explanations for certain situations are presented. An example with a successful outcome is Disney’s acquisition of Pixar, and an example with a poor outcome is Bayer’s acquisition of Monsanto. This paper seeks to expand the existing literature on mergers and acquisitions and to approximate the theory and processes that take place during the decision on mergers and acquisitions. The paper consists of six chapters, the first of which is an introduction, followed by a chapter explaining the concept of mergers and acquisitions, its past and trends. This chapter is followed by the theory of valuation of the target company, which describes the methods and principles of analysis in assessing the value of the company. Then, the practical part follows, in which the two mentioned real-life examples are studied. The paper ends with a conclusion where all the final results and opinions are presented.