Charles H. Friedrich, III
Partner
201-896-7031 cfriedrich@sh-law.comAuthor: Charles H. Friedrich, III|May 22, 2017
Mergers and acquisitions can help companies achieve a number of strategic goals, including growth acceleration, improved performance, development of new skills/technology, and elimination of competition. They are also among the most complex business transactions. Before beginning the negotiation process, it is imperative to be well-versed in the merger and acquisition terminology that will be used by the parties and their counsel.
The type of transaction often dictates the legal terminology that is used. In an acquisition, one company acquires all or substantially all of the assets or stock (or other equity interests) in a target company. Whether the target company survives will depend upon whether the transaction is structured as an asset transaction or an equity transaction. In the former, the target company is often dissolved and ceases to exist after the transaction is completed. In the latter, the target company survives under new ownership and control. In a merger of the target company into the acquiring company, the acquiring company acquires all of the assets and liabilities of the target company by operation of law and only the acquiring company survives.
Mergers generally take one of the following forms:
Being able to “talk the talk” allows business owners and managers to more fully participate in M&A transactions. Below are several legal terms that may be used:
This post provides only a brief look at the legal terms that may arise during a merger or acquisition. Prior to entering into any business transaction, it is imperative to work with an experienced attorney who can walk you through the process and answer any questions you may have. Therefore, if you have any questions or if you would like to discuss the matter further, please contact me, Charles Friedrich, at 201-806-3364.
Partner
201-896-7031 cfriedrich@sh-law.comMergers and acquisitions can help companies achieve a number of strategic goals, including growth acceleration, improved performance, development of new skills/technology, and elimination of competition. They are also among the most complex business transactions. Before beginning the negotiation process, it is imperative to be well-versed in the merger and acquisition terminology that will be used by the parties and their counsel.
The type of transaction often dictates the legal terminology that is used. In an acquisition, one company acquires all or substantially all of the assets or stock (or other equity interests) in a target company. Whether the target company survives will depend upon whether the transaction is structured as an asset transaction or an equity transaction. In the former, the target company is often dissolved and ceases to exist after the transaction is completed. In the latter, the target company survives under new ownership and control. In a merger of the target company into the acquiring company, the acquiring company acquires all of the assets and liabilities of the target company by operation of law and only the acquiring company survives.
Mergers generally take one of the following forms:
Being able to “talk the talk” allows business owners and managers to more fully participate in M&A transactions. Below are several legal terms that may be used:
This post provides only a brief look at the legal terms that may arise during a merger or acquisition. Prior to entering into any business transaction, it is imperative to work with an experienced attorney who can walk you through the process and answer any questions you may have. Therefore, if you have any questions or if you would like to discuss the matter further, please contact me, Charles Friedrich, at 201-806-3364.
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