Brewer & Pritchard: Mergers and Acquisitions Explained

Mergers and acquisitions: A Part of Business

• Mergers and acquisitions (M&A) are a part of business finance and corporate strategy that deals with the buying, selling, dividing, and combining of separate companies.

• The goal is to join resources in an effort to create favorable business results.

• The philosophy in support of mergers and acquisitions believes that a business environment where both entities are joined as one is better to navigate than if both maintained their autonomy.

• When companies share an economic interest, the promise of creating efficiencies and economies of scale is often intriguing to both parties.

Types of Acquisitions

• An acquisition is the purchase of one business or company by another.

• This usually applies to the purchase of a smaller company by a larger one, and may be straightforward or hostile.

• In a straightforward acquisition, the two companies cooperate in negotiations.

• Hostile acquisitions attempt to take over a company that refuses to negotiate by acquiring a majority share of stock.

• This can be done against the wishes of the “target” company.

Get The Best Deal

• In each case, the target company still exists as an independent legal entity, but it is controlled by the acquirer.

• A merger, on the other hand, can be seen as a mutual decision made by two relatively “equal” entities to combine and become one.

• Mergers are much more straightforward deals that include negotiations and direct dealing.

• The success of any merger or acquisition is dependent on the level of positive synergy created.

• Working with a professional firm that can negotiate the deal can help make this happen.

About the Company:

• Brewer & Pritchard handles a wide variety of legal issues in the Houston area.

• They are experienced in negotiating corporate litigations, securities, mergers, acquisitions, and more.

• For more information, visit www.bplaw.com.