Caufield & James, L.L.P Caufield & James, L.L.P

Serving clients in Hawaii and throughout California, including Sacramento, Fresno, San Francisco Bay Area, Los Angeles, Bakersfield, Chico, Jackson, and San Diego

Call us now toll free:866-585-8944
search Navigation Menu

What to consider during a merger

California companies that are looking to acquire or merge with other businesses need to take the due diligence process seriously. Ideally, they will spend a lot of time listening and learning as much as possible about an acquisition target. Taking this step makes it possible to learn more about whether a business is worth taking over or if there is too much overlap between the two entities.

It is also a good idea to be upfront about any issues that could scuttle a potential deal. This prevents a situation where a transaction is almost completed but can't be closed because of an unforeseen objection. Companies that are approached about a merger or acquisition should assume that a competitor isn't serious about a deal at first. An exception may be made if a CEO or other decision maker has initiated contact.

If a competitor is serious about a transaction, the target should ask how it will be funded. There have been stories in the past about companies that went through the due diligence process only to reveal that there was no money to close the deal. Management should also take the time to understand why a competitor is interested in a deal. Typically, a merger is a way to eliminate competition, gain access to a product or acquire skilled employees.

A merger may be either a friendly or hostile acquisition, and this depends on whether the acquired company wanted to take part in the transaction. Regardless of how a merger or acquisition occurs, all parties may benefit from going through the process with the help of legal counsel. This may make it easier to complete the due diligence process in a thorough and timely manner.

No Comments

Leave a comment
Comment Information

Contact us now to begin a confidential case evaluation:

Caufield & James, L.L.P

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

[an error occurred while processing this directive]