Mergers and Acquisitions
An overview of mergers and acquisitions law
Mergers and acquisitions are extremely common in the corporate world, though they also bring up a number of legal issues. While a merger involves the combination of two companies into a new company, an acquisition brings one company under complete control of another, dissolving the acquired business. Although mergers and acquisitions involve some different issues, assets, layoffs inventory and stock compensation are realistic concerns in any deal.
A merger can be a great way to optimize profits, increase efficiency and maintain a competitive edge, but only if the deal preserves important aspects and focuses on a stable transition. Discover the issues involved in corporate acquisitions and mergers, and how to ensure a smooth and legal business transition.
Mergers and Acquisitions Law
Depending on the type of business that is being merged or taken over, assets and asset transfers can get complicated. For instance, the major assets of a technology company have to do with intellectual property, and require patents to protect the unique ideas and technology developed by the company. A review of the target company's patents and patent applications will be necessary, and you will need to sort out where copyrights stand.
Every merger and acquisition must attend to employee issues, including whether to retain them after the deal. Keep in mind that the company's customers are affected by the merger or acquisition as well, and often it is the employees that have built and maintained these client relationships. The issue of an employee working for the competition is another tricky matter—how do you respect labor law while keeping the company's best interests in mind? The twisting path to a successful merger or acquisition can be difficult to travel, but a lawyer with expertise in corporate mergers and acquisitions can point out important details and keep your business on track.
Successful Mergers and Acquisitions
An acquisition may be friendly or hostile, and the hostile takeovers typically involve more legal involvement. While a friendly transaction involves cooperation between the two sides, a deal becomes hostile when the company that has been targeted for takeover is unwilling to be bought or their board of directors is unaware of the deal. Although hostile deals can eventually turn friendly, they require negotiation and alteration of the terms of the deal with the help of a lawyer.
There are a number of workers, shareholders and business leaders who have opinions on how the balance of control should or should not be shifted, and it will be a good idea to seek advice, mediation and professional expertise from an experienced corporate merger and acquisitions lawyer.