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What can go wrong in a New York business merger?

On Behalf of | Jul 5, 2023 | Business Start-Ups

When two New York companies join forces, they become a bigger, stronger and hopefully more successful business. This type of strategy has helped many struggling businesses to stay afloat. However, if legal complications arise during a business merger, it is important to know where to seek support.

If a merger and acquisition fails, the companies involved might wind up in worse shape than they were to start. There have been some disasters in recent decades between major business entities, such as Nextel and Sprint, as well as America Online and Time Warner. When problems arise during the merger process, it is imperative to know where to find support, especially if the problems in question involve legal issues.

The acquiring company should avoid overpaying

A business acquiring another company through a merger should never pay more than the expected benefits of the acquisition. In some cases, those negotiating such deals might be so focused on clinching the deal that they fail to carefully assess whether the price is in their best interest. It is also critical that the acquiring party thoroughly reviews and understands the terms before signing a contract.

With Quaker Oats and Snapple, problems arose in the marketing aspect of the combined businesses. The two companies were coming from two very different backgrounds as far as their product cultures and marketing campaigns. The failed merger caused Quaker Oats to lose a substantial amount of equity value from the deal. The key to overcoming legal issues and problems associated with mergers is to have an experienced legal team on board from the start who can review a situation and provide immediate guidance and support.


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