Mergers and acquisitions can be a great way to grow a business. The unifying of two companies, however, is legally and logistically complicated. There are complex agreements to put in place and hurdles in how best to structure the whole deal. In order to help ensure that you are integrating two companies in a way that is both legally sound as well as maximizing the benefits of merging two companies, then careful consideration and planning is critical. Be aware of the legal aspects involved in mergers and acquisition as well as the best practices to set the whole thing up for success.
Mergers and Acquisitions: Legal Considerations and Best Practices
There are a number of best practices you can take on to help set a merger and acquisition up for success. After all, you are jumping through all of the hoops necessary to join two businesses in order to form one bigger, better company. You might as well take those steps that will help ensure the two companies emerge stronger when unified. This can begin with working to understand the organizational structures of both companies. Take a look at how both companies operate and the differences, as well as the similarities in their structures and processes. How do each manage important data such as customer and product information? Such an understanding will play a central role in effectively merging the two operations.
Among the various plans that should be developed over the course of a merger and acquisition, there should be a plan for a swift and achievable transition in the management framework. This type of change must be done quickly and decisively to help ensure confidence is built and maintained throughout various levels of the company. Furthermore, communication plans should be developed at all levels of the company so that everyone is remained informed on changes such as those taking place in management. Employees should be kept informed as to how the transition may change their roles in the company and open up career development opportunities. Customers should be kept informed as to how they will benefit from the merger.
The merger and acquisition process is also an excellent time to reflect and take action on opportunities for improving business operations. After all, it is such a big time for growth and change. It can be an excellent time to reflect on what could be done better as opposed to looking for what could stay the same. Be sure to pursue those potential improvements that could have maximum returns.
To help ensure the deal is going to be a success and you are not going to simply end up merging with a liability as opposed to an asset to your company, due diligence is essential. Due diligence should involve the exploration of a wide range of legal implications for a merger and acquisition. Legal issues should be investigated. The financial status and strategies of the companies should be looked into, any potential employee and management issues should be noted as should things like potential tax issues. Among all of the things that take place in a merger and acquisition, due diligence is perhaps the most important. Make sure you know what you are getting into. Once the merger is complete, things like pending litigation matters and other legal concerns of the other company will become your problem as well.
Other legal considerations in merger and acquisitions are how to structure the deal. There may also be taxation issues. You will need to ensure that the companies remain in compliance with employment laws such as hourly and salary wage laws throughout the process and thereafter. Any regulations relating to the industry both companies operate within must be observed as well.
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The intricacies of a merger and acquisition run far and wide. Let the team at Jones, Gregg, Creehan & Gerace help ensure things run smoothly, efficiently, and effectively. Contact us today.