For anyone who enjoys movies about the market or finance, you might be familiar with the term mergers and acquisitions. However, other than a term often associated with corporations, most people do not consider what a merger and acquisition are and how it may impact them. In this article, we will explain what mergers and acquisitions even are, as well as how the two concepts might impact your business.
What Are Mergers And Acquisitions?
Although often included in the same phrase, a merger and acquisition are two different things. A merger is when two or more companies combine into one. An example of a merger was in 2015 when Dow Chemicals merged with DuPont to become, at that time, the largest chemical company in the world. An acquisition, on the other hand, is when one company purchases another company. An acquisition may be a friendly purchase or considered hostile. An example of acquisition is when Vodafone acquired Mannesmann, which made Vodafone the world’s largest mobile telecommunications provider.
Are Mergers And Acquisitions Simple Processes?
No, mergers and acquisitions are a very complex process that takes many months, if not years, to complete. Moreover, depending on the type of merger or acquisition, matters can become even more complicated. Some types of mergers and acquisitions are as follows:
- Hostile Takeovers
- Negotiated Mergers
- Stock Acquisitions
Each merger and acquisition has its laws and regulations to follow.
Who Regulated Mergers And Acquisitions?
Some many rules and regulations oversee mergers and acquisitions. The most important law guiding mergers and acquisitions is the Sherman Antitrust Act of 1890. The regulatory agencies that oversee mergers and acquisitions are The Securities Exchange Commission (SEC), The Federal Trade Commission (FTC), and The Department of Justice (DOJ), which handle the federal oversight. There might also be state and local agencies that might have authority as well. If the companies in question are from two different countries, then there will be regulatory issues in both countries that will need to resolve as well.
Can A Merger And Acquisition Occur Without An Attorney?
Although it may be possible to complete a merger and acquisition without the assistance of an attorney, we do not recommend it. Mergers and acquisitions are a complex area of law that requires expertise to navigate the various regulations, tax liabilities, labor issues, employment issues, and protecting stockholder and investor interests, to name a few concerns that will need to be resolved to be approval of any merger or acquisition are to occur. Additionally, the approval process has many deadlines and regulatory filings that must be completed. If one detail is off, then the whole process could be for naught. Hiring a professional attorney well-versed in these issues will ensure that all of these concerns will be addressed and the interests of the company will be protected.
Whether you are looking to merge, acquire, or facing the possibility of someone else acquiring your business, contact Dowd Law. The lawyers at Dowd Law have years of professional experience in handling complex merger and acquisition issues for their clients.