How do mergers and acquisitions work?

Mergers and acquisitions (M&A) are transactions that involve the combining of two or more companies, and can involve various legal processes. In the state of Arizona, M&A transactions are governed by the Arizona Business Corporation Act of 1983. The process of a merger begins when two companies agree to combine their businesses. To execute this, both parties sign legally binding documents such as a merger agreement and an interim proxy statement. A merger agreement outlines the details of the merger including how it should be conducted and the benefits that all parties involved will receive. An interim proxy statement is a document that informs shareholders of the proposed merger and is designed to solicit approval and votes from shareholders. The process of an acquisition is similar, however, instead of the two companies merging, one company will be purchased or absorbed by the other. This requires that the company being acquired agrees to the transaction. A Letter of Intent (LOI) is used to outline the details of the transaction and represent the company’s willingness to enter into the transaction. Once the parties have agreed and documented the details of the transaction, it is reviewed and approved by state and federal regulators. After this, the two companies must then comply with applicable laws and regulations and complete the transfer of ownership of assets. Once all of the necessary documents have been filed, the M&A transaction can be declared legally complete. This allows the businesses to start operating as one entity and combine their resources for future growth.

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How do mergers and acquisitions work?

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