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What happens after a merger?

by | Jun 4, 2021 | Mergers and Acquisitions

When two New York companies merge, they generally form a single new entity. However, this doesn’t mean that the acquiring company simply does away with everything related to the business that it just merged with. It’s not uncommon for a business to continue operating using its existing brand name, slogan and other identifying information after it has been bought out.

Smaller brands can be powerful tools for larger businesses

It isn’t unusual for small business owners to grow their companies in a manner that makes them attractive targets for larger firms. For instance, entrepreneurs may focus on developing a single product that an existing firm isn’t able to develop on its own in an affordable or effective manner. In some cases, entrepreneurs start their own companies to prove to existing firms that they would make great additions to those organizations. Assuming that a brand has strong name recognition, is profitable and adds value to a company, it would make little sense to simply shelve it.

Employees may be terminated or reassigned

Even if a brand isn’t killed off after being acquired, there is a chance that some of its key employees will be let go. This is typically done to eliminate redundancies that could cost the new organization money. An attorney who is familiar with acquisitions and mergers may be able to help a business owner learn more about their rights after taking ownership of a competing organization.

If you have questions about what might happen to a business after a merger, don’t hesitate to contact an attorney. Ideally, you’ll contact a legal adviser as soon as you know that your business might be joining forces with another organization in the future. This may make it easier to determine if doing so is in your company’s best interest.