Mergers and Acquisitions
Mergers & Acquisitions
A merger and acquisition (M&A) refers to the consolidation of two companies- either through assets or through a number of different financial transactions. A M&A may include consolidations, tender offers, asset and purchase contracts, and strict mergers or strict acquisitions.
Companies merge for a number of different reasons. Sometimes it’s a way for a company to gain a greater market share, and at other times, it’s used as a way to attract private capital investment.
A merger and acquisition can be completed as quickly as three weeks. One of the most significant aspects of merging two companies is the size and structure of the companies. Other mitigating factors include the industry in which the companies operate in. As blockchain companies become more popular, the industry is expected to experience a greater number of blockchain mergers in the near future.
Embarking on a Merger and Acquisition to go public:
Another reason why companies choose to merge is due to the desire to go public. Going public has many advantages, including the provision of employee stock options and the ability to obtain large capital investment.
Other factors that affect the length of time to complete a merger:
- Shareholders consensus affects the merger timeline. As shareholders of both companies must vote on the merger, putting the vote to each respective company’s shareholders may take time
- Antitrust legislation affects a timeline. Mergers must comply with antitrust regulations which factor into the merger time frame
- Size of each respective company
- Industry of the companies. Some industries take longer than others
- Tax considerations are a big factor in how long an M&A may take
Attorneys that regularly assist with mergers and acquisitions and reverse takeovers (also known as reverse mergers) are skilled in the legal complexities of mergers, have industry knowledge of both companies that wish to merge, and understand the potential risks associated with mergers.