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5 Common Myths About Mergers And Acquisitions In Illinois

  • By: Craig Donnelly, Esq.

Finger pressing "mergers & acquisitions" key on a keyboard.In this article, you will discover:

  • Whether mergers and acquisitions are only for large companies.
  • If mergers and acquisitions can lead to layoffs.
  • Whether mergers and acquisitions are typically adversarial.

Are Mergers And Acquisitions Only For Large Corporations?

Most of the acquisitions we handle for clients are for smaller companies. For example, we represent entrepreneurs who started up their companies and have achieved enough success and attention in the marketplace that a larger competitor wants to acquire them for a generous amount. In such a case, we will help you maximize your value and protect your interests as you sell your business.

Is It True That Mergers Always Lead To Layoffs?

It is true that sometimes an acquiring entity will lay off some employees of the entity being acquired. However, many of the clients we have represented are smaller entities with few or no employees at all.

Sometimes, we represent clients who are single-member LLCs or a sole proprietor selling their businesses or their intellectual property. And in some cases, that individual enters into an employment contract with the new employer. 

There are few limitations to the possibilities that may arise in a merger or acquisition. Everything depends on the facts and circumstances of that particular acquisition.

Do Mergers Guarantee Business Growth And/Or Success?

Unfortunately, very few things in life, including business, are guaranteed. Frequently, if your business is seeking to grow or expand by acquiring another company, an acquisition may be the springboard that you have been looking for. Like any business venture, such a major event does not come without risk. It is critical that the acquiring company perform its complete due diligence into the assets and liabilities of the company being purchased to be sure there will be no surprises. With completed diligence, it is critical to make sure that you are represented by a competent business attorney who can prepare or review the various documents that will be involved in the transaction. With complete research and the right team in place to help you, the chances of success following an acquisition are substantially increased.

Can Mergers Negatively Impact Existing Client Relationships?

Generally, if we’re representing an entity acquiring another company, that relationship grows along with the acquisition. If we are representing a company being acquired, the former entity will frequently be absorbed into the new entity, and the relationship with the accompany that was acquired may technically then terminate. 

However, in our experience, the individual or individuals who sold their business frequently come back to us for future ventures they engage in. We are constantly enhancing our relationships with our clients.

Many People Think M&A Deals Are Always Adversarial. Is This True In Your Experience?

More often than not, it’s precisely the opposite. While there may be specific points in time during the process where negotiations may become problematic over a particular issue, generally speaking, experienced attorneys and sophisticated parties can ultimately reach an amicable resolution that benefits both sides.

How Do You Manage Situations Where Tensions Run High Between Parties?

Typically, when tensions run high during a merger and acquisition, taking a break within the timeline of the deal may help to lower the temperature.

Also, if we’re in a face-to-face or Zoom negotiation, we will take a moment to step out and speak with you privately to help you refocus on the ultimate goal and our end game.

Still Have Questions? Ready To Get Started?

For more information on Myths About Mergers and Acquisitions In Illinois, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 608-2124 today.