Tampa Mergers & Acquisitions Attorneys
Effectively Helping Our Clients Consolidate Their Businesses
At Four Rivers Law Firm, our lawyers are well-versed on the requirements to successfully complete a company merger or acquisition. We understand the complexities of consolidating two businesses into one and can help you complete this process in the most financially lucrative way possible . We do so by developing and/or refining business strategies that lead to these types of transactions.
People often utilize the terms ‘merger’ and acquisition’ interchangeably, but these two legal actions are not the same. Our attorneys can help you determine which would work for your unique situation and help you construct a solid plan of action.
What Is a Merger?
A merger occurs when two companies of the same size join forces and move forward as one company. Both companies’ stocks are liquidated and new stocks that reflect this change are issued. Usually, the board of directors for both companies approve this action and seek approval from the shareholders.
How Is a Merger Structured?
There are a few different ways you can choose to structure the merger of two companies. Usually, the merger is structured based on the relationship between the companies involved.
The structures are:
- Horizontal: Two companies that are in direct competition and share product lines and markets merge into one. For example, companies that manufacture baseball supplies join forces.
- Vertical: Two companies whose products complement each other merge into one company. For example, a business that manufactures cones merges with one that manufactures ice cream.
- Congeneric: Two companies that serve the same consumers, but in different ways, merge into one company. For example, one business that sells cable and another that manufactures televisions merge.
- Market-extension: Two companies that sell the same products, but in different markets, merge into one. For example, one business that sells razors for men merges with another that sells razors for women.
- Product-extension: Two companies that sell different products but are complementary to each other in the same market merge into one company. For example, a business that sells dog food and another that sells dog toys.
- Conglomeration: Two companies that sell different products that have no common factors merge into one. For example, a business that sells clothing and one that sells sporting goods.
What Is an Acquisition?
An acquisition occurs when one company takes over another company or corporate entity and establishes itself as the new owner. The acquired company legally ceases to exist, and the buying company completely absorbs the business and its associated stocks. However, the acquired company usually continues to operate as if it were a separate entity.
What Legal Transactions Count as a Merger or Acquisition?
There are a few other actions that may be considered a merger or acquisition:
- Consolidation: A consolidation creates an entirely new company out of the merger or acquisition. For this action to take place, the stockholders of both companies must first approve this consolidation.
- Tender Offer: A tender offer occurs when one company offers to purchase any outstanding stock of another company at a certain price point. The acquiring company deals with the other company’s shareholders rather than the board of directors and/or management.
- Acquisition of Assets: An acquisition of assets occurs when one company obtains the assets of another. The company seeking the assets must first gain approval from the shareholders of the other company. This legal action usually occurs during bankruptcy proceedings where companies can bid for the assets of the bankrupt company.
- Management Acquisition: A management acquisition occurs when a company’s executives purchase a stake in another company. This type of transaction is usually funded with credit and must always be approved by the majority of shareholders from the purchasing company.
Providing Effective Legal Counsel & Services
At Four Rivers Law Firm, our attorneys are dedicated to providing high-quality advocacy and guidance to our clients. Whether you are looking to acquire or merge with a business, we can help you work toward your goal.
Fill out our online form or call us at (813) 331-5056 for your legal consultation.
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