Mergers and Acquisitions: What to Do Next?

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Mergers and Acquisitions Next Steps

Mergers and acquisitions (M&A) is an overarching term used to describe the combining of two corporations to make one large company. The reason for such a coming together varies but sometimes may be the result of one business attempting to cut its cost of operation by joining with another, more stable, corporation.

It is certainly necessary to involve a Chicago IL business lawyer in M&A transactions as confusion may arise with regards to ownership and other pertinent issues while finalizing the deal. The associates at Anthony J. Madonia & Associates can work to ensure that all business partners are on the same page.

More About Mergers and Acquisitions?

Despite being referenced as one concept, the terms “mergers” and “acquisitions” have separate meanings. Mergers occur when two companies come together and agree to partner in business decisions and expansion. The corporations involved in the transaction usually have equal value, which makes the transaction more about strengthening a brand rather than one company rescuing the other from financial ruin.

Acquisitions, on the other hand, may involve more of a bailout. This process involves one company taking ownership of another and changing everything from the former business’ name to its staff members. Some businesses go the route of an acquisition when on the verge of bankruptcy. The approach may allow the troubled company to garner some sort of profit instead of outright failing.

Why Mergers and Acquisitions Fail

Merger and acquisitions (M&A) do not always flow smoothly. In fact, there are instances where transactions fail. One of the main reasons why M&A procedures fall through is because of limited owner involvement. Nearly every mid-to-large-sized deal requires an advisor to serve as a mediator. The advisor should not be considered the alternative to communication, though. Owners from both parties still need to discuss the terms of the agreement and ensure that everyone is on the same page.

It may also be in the best interest of all parties to obtain an appraisal before closing the deal. This additional step may help owners avoid the second common reason for M&A failures, which is the failure to implement the terms after the merger has closed.

The Need For A Lawyer