There are several potential reasons to merge with another business. However, this is not a decision you should make lightly. A successful merger can reduce the total expenses for both companies, but any errors during the process could result in the buyer or seller being inadequately compensated.
Consider talking to a knowledgeable attorney about the benefits of merging with another business in Georgia. At Sparks Law, our legal team has experience working with entrepreneurs. Our lawyers can objectively assess the risk associated with a potential business transaction and advise you on the best course of action.
Most mergers are motivated by potential efficiency gains. Generally, two companies will decide to join forces if they believe the merger will reduce their expenses and overhead costs. Another benefit of merging businesses is reduced competition with the opposing company.
The Walt Disney Studios and Lucasfilm are an excellent example of how a merger can reduce competition. In 2012, Walt Disney purchased Lucasfilm—the company known for producing the Star Wars movies. Although the businesses had merged, they continued to differentiate their products and services. Now, Walt Disney does not have to produce science fiction movies to compete with the Star Wars franchise.
Many business owners decide to sell their companies when they want to retire or move on to another project. After merging your business with another, you can still receive dividend payments without the stress of having such an active role in the company. Decreases in demand for a particular product or service can also influence a merger.
As a result of the coronavirus pandemic that began in late 2019, restaurants and movie theaters experienced a drastic decrease in demand. Customers in those industries decided to stay home, turning to online streaming platforms and food delivery.
Consequently, many companies decided to merge to lower their costs. With a newly combined business, companies can save money on rent and cut employment prices. This allows business owners to stay afloat even when there is a considerable reduction in customers and profits. If you have any questions about the timing of your merger, you should speak with a lawyer in Georgia to discuss what would benefit you in your specific situation.
There are many benefits to merging with another business in Georgia, but you need a confident and experienced lawyer to execute a successful deal. Our attorneys at Sparks Law are well-versed in writing legal documents such as partnership agreements and employment contracts that can make your business transaction run smoothly.
We can draft agreements that protect you from key employees who may attempt to make trouble for the new management team. Our legal team can also help you execute contracts that prevent workers from taking your trade secrets and setting up a competing business. Sparks Law can help you protect your company and achieve your goals.