How do mergers and acquisitions work?

Mergers and acquisitions (M&As) are activity involving the combination of two or more companies into a single entity, or the takeover of one company by another. The purpose of these transactions is to make a company stronger, more competitive, and also to increase revenue, profits, and assets. In Ohio, M&As involve many legal steps. First, the company entering into the transaction must conduct due diligence, which is the process of researching the other company and evaluating its financial statements and other information. Second, an agreement must be negotiated and drafted that outlines the details of the merger or acquisition. The agreement will typically include details such as the exchange ratio, who will continue to manage the combined entity, and so on. Third, both companies must approve the M&A transaction through a vote of the boards of directors and shareholders. Once approved, the transaction must be registered with Ohio’s Secretary of State. In addition, both companies must receive approval from the Federal Trade Commission and the Department of Justice, if required. Finally, the deal must be closed. The closing process involves transferring assets and the exchange of securities, such as cash, stock, or debt. After this is complete, the two companies become one merged entity. M&As can be complex transactions, and compliance with Ohio and federal laws is essential to completing a successful merger or acquisition.

Related FAQs

How do mergers and acquisitions work?

Related FAQs

Related Blog Posts