Mergers & Strategic Transactions: Forms and Contracts

What is a Merger?

A merger is a major event in the life of a business and may impact many stakeholders including shareholders, directors, managers, employees, and customers. When two companines "merge," they combine their assests and liabilties. Essentially, one company "survives" while the other company's shares are converted into the shares of the surviving company. Both companies must always proceed with due dillgience by carefully studying the finances and legal status of the other company.

Real World Merger Examples

For instance, in 2006, two of the biggest names in movie history, Disney and Pixar, merged to become one. The deal was a sucess leading to the creation of such blockbusters as "Cars," "Tangled," and "Frozen." Another example of a sucessful merger was the Exxon and Mobil oil deal from 1999. The two companies agreed to merge to beomce ExxonMobil, one of the most powerful companies in the world.

Not all merger talks are successful, however. EMI and Warner Music attempted to merge back in the year 2000, but were utlimately unsucessful. In 2006, Yahoo attempted to snatch up FaceBook, only to be turned away.

Should My Company Merge?

Whether a merger is the right move for your business depends on many factors including whether your company's core values will be protected and sustained in the new entity and whether or not the merger is a strategic fit.

Attorney Roles

Attorneys play a vital role in how mergers and acquisitions are handled. As a smalll business owner thinking of merging, you'll want to be familiar with items such as the due dilligence, the valuation process, sample representations and warranties, completeing an assest sale and more. This is not a business transaction you'll want to engage in without sound legal advice.  

Forms and Contracts Links

Below, you will find a number of useful forms and contracts to assist you small business with the merger process.

• Merger Agreements: Real-Life Examples
• Merging with Another Business - Questions to Ask Prospective Intermediaries - Lists questions to help determine whether an intermediary is qualified to represent you in a merger.
• Due Diligence Checklist - Purchasing a Business
• Due Diligence Checklist - Being Acquired
• Questions to Answer Before Beginning the Valuation Process - Lists questions a business will likely be asked during an appraisal.
• Sample Representations and Warranties - Lists common representations and warranties that an acquirer will normally request from a company it intends to acquire.
• Valuing a Business: Reading a Balance Sheet - Provides a sample balance sheet with definitions and descriptions of key elements.
• Questionnaire - Confidential Business Purchase Information - Lists information you should be prepared to provide your attorney if you are seeking to buy an existing business or franchise.
• Completing an Asset Sale - a Sample Closing - Lists documents and other items needed for the sale of a business when real estate is not being transferred.
• Asset Purchase Agreements: Real-Life Examples
• Stock Purchase Agreements: Real-Life Examples
• Franchise Agreement Questionnaire - Questions to consider and review with your attorney before entering into a franchise agreement.

Where to Find an Attorney

It is without question that when you are thinking of merging with another company, you'll want legal advice. Finding the right lawyer may take some time. You can start by contacting a business and commercial law attorney in your area today.