Successful business conduct implies flexibility in asset handling, orientation in the economic situation, and timely response to market changes. One way to optimize an existing business is through a merger.
In the process of performing professional activities, a moment comes when the goals are fulfilled. What to do when there is a need to move to a new level of income, but there is no desire to repurpose the business? The merger procedure is one of the ways to modernize a business.
Reorganization in the form of a merger will become an effective method in the event of an unprofitable enterprise as an alternative method of liquidation.
Reorganization as an alternative to liquidation
When reorganizing an enterprise, the issue of legal succession of a newly created legal entity is at the forefront.
The legislation provides for several scenarios for the transformation of an enterprise, during which one legal entity is liquidated and another legal entity is created.
One of the forms of transformation with the termination of the previous legal entities and the formation of a new legal entity is a merger. The newly formed legal entity is the legal successor and bears the burden of responsibility for the debts of the liquidated legal entities. persons.
Reorganization in the form of a merger is also used to strengthen, expand the sphere of influence and optimize the production and management processes of a completely successful enterprise.
Mergers and acquisitions of organizations as a transformational strategy
Conversion in the form of a merger is advisable when it is necessary to optimize activities, enter a new level of business, to enhance competitiveness.
In a merger, there is either a change of ownership or a change in the ownership structure.
A horizontal merger is distinguished, in which organizations engaged in a homogeneous type of activity are united, and a vertical one, which combines various stages of business.
In the first case, the sales market is optimized and the sphere of influence expands. In the second - a decrease in the cost of production.
The merger takes place with an equivalent combination of the assets of the organizations. Unlike a merger, a takeover implies a weakening of the influence of the assets of the target organization.
The merger is carried out with the mutual consent of the management of the organizations. However, as practice shows, it is not always possible to achieve parity in the merger procedure, and more often the merger ultimately represents the takeover of a less successful company.
Among other forms of reorganization, mergers and acquisitions are the most complex legal and economic procedures. In addition to the Civil Code and Federal Law, mergers and acquisitions are subject to antitrust laws.
