When companies join forces through legal channels, the result can provide unique opportunities for success. Depending on your goals and the details of your transaction, you may leverage a merger to expand your market or product/service offerings. Mergers can be horizontal, vertical, or conglomerate.
Determining the most effective structure for your merger can present a substantial challenge. You must also determine how the new entity’s shares will be distributed, how the new entity will be structured, and more.
In addition to mergers, businesses frequently undertake acquisitions as a way to expand their reach. Acquisitions involve one entity acquiring another, either through the purchase of assets or an equity interest or via a stock purchase.
In a stock purchase, the buyer acquires the target entity, including its assets and liabilities. By contrast, in an asset purchase, the buyer can select which assets and liabilities to acquire, such as contracts, inventory, equipment, facilities, etc.