About Merger
A merger is a corporate acquisition that involves two companies or businesses joining forces to form a new company. This may be a result of a desire to gain market share, reduce costs, expand into new territories, unite common products or other strategic reasons. Successful mergers can bring about significant business benefits such as synergies, cost savings, and growth opportunities.
The M&A process can be complex, but it begins with high-level discussions between potential buyers and sellers to explore how their values align and what synergies might be realized. This is followed by due diligence which includes an examination of financial reports, market data and competitor analysis. The final stage is negotiation and implementation of legal documents which set out the terms of the deal, including the exchange and transfer of shares. These documents also specify how the percentage of ownership of both companies may change, and in turn affect shareholders’ decision-making power.
During the M&A process, employees may have many questions about how their role in the new organization will evolve and whether their job is at risk. To alleviate anxiety, it’s essential to keep them updated with regular, transparent communications throughout the process. It can also help to offer support services like counseling or workshops during this time.
In the US, companies filing for a merger must submit their proposal to federal antitrust authorities to be reviewed and cleared. This typically takes a few months. If the agencies need more information, they will issue both parties a Second Request asking for additional business documents and data and interviews with company staff or other industry participants.