If you are considering an offer to merge your company with another business, you may wonder what it will mean for your operation. While a merger might mean the end of your business, this is not always the case. Mergers take different forms, so it is possible your company may survive and operate almost no different than it does at present.
Before you merge your company with another, you should know how a merger may reconstitute the two companies involved. Chron explains three different ways a merger could affect your business.
Your company does not survive
It is possible the other company will absorb the assets of your business while discarding your company’s name and branding. The other company might terminate some of your employees or close down some of your locations to consolidate and eliminate redundancies. If your company operates retail stores, the new parent company will likely put the parent company’s name on them.
Both companies do not survive
There are some mergers that actually cause both businesses to cease to exist. Instead, the two companies combine into a new business. This new entity takes over the assets of the two prior companies and reconstitutes them into a new structure with a new name. This option may work if the two companies involved are struggling financially and/or have a poor reputation with the public.
Both companies survive
Finally, there are mergers that allow the two companies to survive even while merged together. This may happen by allowing your business to continue to operate under its old name. Your company may retain its own marketing, accounting, human resources, and intellectual property. Some elimination of your jobs may still happen, like the dissolution of your corporate offices, but otherwise, your business will operate with the support of the new parent company.
The differences in how mergers turn out make it important to discuss the terms of your merger with the owner who wants to merge with your company. You may find a specific kind of merger best meets your priorities.
