Merger and Acquisition

The phrase mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.

Although often used synonymously, the terms merger and acquisition mean slightly different things. When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer “swallows” the business and the buyer’s stock continues to be traded.

In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a “merger of equals”. The firms are often of about the same size. Both companies’ stocks are surrendered and new company stock is issued in its place.

An acquisition is the purchase of one company by another company. Consolidation is when two companies combine together to form a new company altogether. An acquisition may be private or public, depending on whether the acquiree or merging company is or isn’t listed in public markets. An acquisition may be friendly or hostile. Terms like Reverse merger, de mergers are also the areas involved in mergers and acquisitions.

Rapid change, market volatility, management of stakeholders, credit constraints and global competitive forces make high value targets riskier to pursue, especially across borders. Well-planned strategies and their effective implementation are critical to getting deals done. When it comes to complex transactions, you need advisers with deep knowledge, vast experience and global watchfulness.

Astrea Legal brings a unique global and strategic perspective to help preserve and optimize deal benefits. Our lawyers with authentic knowledge of local regulations and transaction management procedures in varied deal contexts. Whether you are buying or selling, entering into a joint venture, or making a strategic investment, we approach each transaction with legal fluency, offering sound and practical advice at every stage.