Mergers and Acquisitions

When looking at options for growing a business, mergers and acquisitions (M&A) typically come up as good solutions. They can help a company become more profitable by being more efficient, by expanding some of their production capabilities, or incorporating the expertise of a former competitor.

Although not synonymous, the two ideas are very similar; a merger is the literal joining of two companies, typically of roughly the same size, to form a new one, while an acquisition is the purchase and subsequent ownership of one company by another.

Types of Acquisitions

There are several different types of acquisitions. A company could buy the shares (and therefore the ownership abilities) of another company, in which they will take on the debts and responsibilities of the purchased business. Another option is to buy selected assets or all assetsof another company, and give the money back to the shareholders in a liquidation.

There can be many motivations for companies to look into M&A. These can include synergies, diversification, cross-selling, improved economies of scale, or vertical integration. Mergers are not always very effective at improving the companies’ bottom lines, but acquisitions can certainly be beneficial.

Contact Us

If you think that mergers and acquisitions may be an area of interest for your business, experienced legal counsel can be valuable when navigating the complexities of combining companies. Contact the Minneapolis business law attorneys of Skjold ▪ Barthel at 612-746-2560 for more information.