3 things to know about mergers and acquisitions

On Behalf of | Nov 29, 2023 | Business Law

Business decisions are sometimes complex. Mergers and acquisitions are complicated situations that often require significant consideration. Business owners must tailor the agreements about these situations to protect their interests. 

It’s critical to ensure they understand exactly what these terms mean so they can make appropriate decisions. These are a few points to think about if you’re considering either a merger or acquisition for your company.

Mergers and acquisitions aren’t the same

Mergers and acquisitions both lead to two companies coming together. A merger involves both companies being turned into a single entity. During the merger, they combine assets. A merger is usually a friendly transaction. 

In an acquisition, one company takes over the other. The company that’s taken over ceases to exist. This is typically a more hostile situation. 

Policies must be clearly defined

Because two companies are becoming one during mergers and acquisitions, policies must be clearly defined for all workers. These transactions usually come with a redefinition of certain job duties and positions. Having everything spelled out may make it easier for employees to adjust to the changes. 

Workplace culture is important

Another change that might occur is with the workplace culture. This is another area that needs to be defined during the transition phase. Employees will take their clues about the culture based on the information provided by the company and the behavior of the supervisors. 

The contracts that come with a merger or an acquisition must be detailed and factual. Having someone on your side who can review this and other aspects of the transaction may be beneficial so you know your interests are protected.