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Understanding mergers and acquisitions in Texas

On Behalf of | Mar 28, 2022 | Business Law

In order to ensure that their business is successful, owners must consistently come up with new ways to fuel growth and development. Mergers and acquisitions are two ways for a business owner to continue to make a mark in the business world.

Mergers

When two companies blend into one, the companies will no longer exist as separate entities. With a statutory merger, which is governed by Texas state law, one company will completely absorb the other. Mergers can increase market share, allow companies to combine resources, and improve efficiency through managerial and departmental changes. However, before the statutory merger can take place, a plan of merger must be created by the board of directors of the corporation, who must then submit the plan to shareholders for approval.

Acquisitions

While merging involves two companies consolidating into one, an acquisition involves one company taking over another company. When an acquisition occurs, the acquiring company may take control of all the assets and resources of the target company, and the target company receives substantial compensation and cedes managerial rights, while remaining a separate entity. In other cases, the target company may dissolve and the compensation it receives from the acquiring company will be distributed to the buyer.

Our attorneys can help with your business transactions

Mergers and acquisitions are some of the most complex and time-consuming transactions business owners may have to face. An attorney specializing in these matters can help by:

  • Drafting and negotiating agreements
  • Analyzing deal structure
  • Advising and collaborating with clients
  • Performing due diligence investigations
  • Filing the necessary paperwork and closing the deal

Attorneys specializing in business transactions can help with every step of the deal while keeping the goals you have for your business in mind.