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What is a business merger?

On Behalf of | Sep 5, 2019 | Business Law

Mergers happen in many different contexts. When two Nevada residents choose to get married, they may be said to have merged their separate lives into a shared co-existence through the formalization of their relationship. Similarly, two businesses may choose to merge and become a single entity: the blend of distinct businesses into one organization is a merger.

Business mergers are not uncommon but each proposed merger should be carefully researched and understood by the parties before it is completed. To ensure that a merger is fair and well-planned, it can be helpful to the involved entities to discuss their needs and expectations with business law attorneys. This post provides information to readers about general business mergers but should not be used as legal advice.

For an entity that plans to merge another into its existing operations, it is important that as much information about the acquired entity’s finances is discovered before the merger occurs. If a business is in debt, or if it has fallen out of good standing with its regulatory or governing body, its value may fall. Mergers can involve the purchase of businesses by others and therefore full financial disclosures should be made available.

In some cases, businesses may choose to use intermediaries to help them merge with or acquire other corporations. An intermediary can do some of the leg work and research for an entity but the qualifications of intermediaries should be carefully investigated before they are brought in to help. The decision to merge with another business is a big one, and not all mergers benefit businesses in the long run. Consultations with business law attorneys should be made before beginning the merger process.

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