A business merger is a legal process that allows two companies to combine into one entity. This may lead to a variety of commercial outcomes, including cost savings and increased bargaining power with suppliers and customers. However, there are many different kinds of M&A, and the type of deal you pursue will shape everything from integration planning to governance and shareholder dynamics.
For example, M&A can help businesses grow by adding new products or markets to their portfolio. A footwear company, for example, could acquire a manufacturer that offers men’s or women’s clothing, opening up those new markets and potentially boosting revenue streams. This might also allow a company to enter more competitive industries or expand into other geographic locations by merging with or acquiring another firm that already has a strong presence in those areas.
M&A can also be an effective way to address issues like declining revenue or debt management. If your company is struggling, a merger can help you keep your business open and maintain your customer base by allowing the buyer to cover your outstanding debts, saving jobs in the process. In some cases, M&A can even allow a company to avoid bankruptcy, as is often the case with firms that are not particularly financially sound. An attorney can help guide you through this process, and they can assist you with other matters such as disputes with shareholders or liability concerns. To learn more about these and other topics, consider signing up for Forage’s Investment Banking Skills Passport.