Mergers and acquisitions occur for many reasons. While many large companies make news when they merge or acquire another business, most of these transactions occur between small and mid-sized businesses. Mergers and acquisitions can help one or both companies, but each of these transactions has a different purpose, and each presents a unique set of challenges. Before embarking on either of these ventures, speak with an experienced business lawyer at Beth Santilli Law. We can help ensure you have all of your legal bases covered so the transaction can proceed smoothly.
What is a Merger?
A merger occurs when two existing companies agree to create one new company. Some of the most common reasons for a merger include expanding the company’s reach, gaining market share, and breaking into new market segments. Regardless of the reason, most mergers occur in order to increase shareholder value. In most cases, mergers occur between two companies of relatively the same size.
What is an Acquisition?
An acquisition occurs when one company purchases another company. The purchasing company can buy another business entirely or purchase enough of the business’s shares to take control of the company. Businesses may seek to acquire other companies for various reasons—for instance, in an effort to expand their market share, to grow the company, or to eliminate competition.
Challenges of Mergers & Acquisitions
Unfortunately, not all mergers and acquisitions are successful. There are many challenges associated with each, and many things that can go wrong along the way. The main legal challenges associated with mergers and acquisitions include:
– Negotiations. Structuring the deal so that all parties can come to an agreement can be challenging. Negotiation is to be expected, and clear drafting of contracts is essential. Any contracts that are drafted should be carefully reviewed and revised by a knowledgeable attorney to help ensure your best interests are protected.
– Due Diligence. In the case of a merger, both parties may wish to investigate each other’s business history, contracts, financials, etc. In the case of an acquisition, this may be a one-way process. In either case, it is important to be clear on the scope of the business that one is purchasing or merging with. A lawyer can help you uncover liability issues with the business you are acquiring or merging with, understand the intellectual property assets and associated rights of the business, and identify issues with any business contracts in place. Having all of this information at your disposal can help you to ensure you are making a sound business decision with your venture and potentially give you leverage at the negotiating table.
Get Legal Help Today
Mergers and acquisitions can be a time of excitement for all companies involved, but the success of these transactions is never guaranteed. At Beth Santilli Law, our experienced business lawyers can help to ensure your best interests are preserved while ensuring a smooth process for all parties involved.
Attorney Beth Santilli knows the applicable substantive law and can serve on your behalf as skilled advisor, negotiator, and draftsperson. We can draft contracts that will protect your interests and give you the best chance of success with your business. If you are considering a merger or acquisition, do not do it alone. Contact us today to request a consultation.