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What it means for two companies to merge

Companies of all sizes in California could potentially find themselves merging with other organizations. Examples of notable past mergers include Exxon and Mobile joining forces in 1999 and Disney and Pixar coming together as one organization in 2006. When the move is complete, one company remains intact while the shares of the other company are absorbed into the surviving business.

If a business is interested in merging, it must determine that doing so fits some sort of strategic goal. It should also take time to ensure that the culture of the organization will be protected if it is being absorbed into another company. These and other questions can be answered during the due diligence process. During this time, both companies will learn more about each other, including their overall financial and legal situations.

There are a variety of forms and legal resources that a business owner can use to go through the merger process in a responsible manner. They can assist a person in valuing a business, deciding what types of guarantees to ask for and reading a balance sheet. Sample forms are also available that have a list of questions that a business owner should ask during the due diligence process.

If a person or corporate entity is interested in buying a business, it may be worthwhile to do so with the help of an attorney. Legal counsel could also be beneficial for those who own businesses that are the target of a merger or acquisition. An attorney may know how to value a company or help an owner understand if he or she is getting the best price for the organization.

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