Understanding mergers and acquisitions

Understanding mergers and acquisitions

On Behalf of | Mar 10, 2021 | Corporate Law |

There’s often a lot of news about mergers and acquisitions in the press. Everyone knows these two types of transactions are about companies coming together. The average businessperson in North Carolina may not know a lot about what differentiates these transactions. However, there are some simple ways to tell them apart.

Identifying an acquisition

In an acquisition, one company takes another over. This can be an outright purchase, but it doesn’t have to be. One of the easiest ways to tell if a transaction is a merger or acquisition is to look at the leadership team. If the team has remained fairly stable, it’s likely that they purchased another company rather than merging one.

The basics of mergers

Mergers are a little different. In a typical merger, two businesses are coming together in a real way. This usually means that there is some restructuring after the transaction is complete. When there’s a merger, some redundant positions will be eliminated or folded into one role. This means changes in personnel throughout the company.

Complexity can be an issue

Sometimes, when big companies are involved in corporate formations, transactions & disputes things can become much more complicated. These transactions are often complex and highly political. It can be such a convoluted process that it is difficult to untangle what exactly happened from the outside looking in. There can be features of both acquisitions and mergers involved.

The complex nature of mergers and acquisitions means that they need expert handling. If your business is in a consolidation phase, look for a qualified attorney. Someone with experience in corporate formations, transactions & disputes may be well-placed to help your company grow, too.