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Legal Issues National International Acquisitions. 2 The Research Paper

¶ … Legal issues national international acquisitions. 2) The types acquisitions a) Off-market b) Hostile c) Negotiated d) Take- business 3) Mention effects acquisitions employees I specifics paper detailed a high level. Company acquisition laws

The modern day business environment is extremely complex and demanding, presenting the economic agents with a series of challenges. They, for instance, have to respond to the ever changing needs of the customer base, the incremental pressures to operate in a socially and environmentally responsible manner, the intensifying forces of competition and so on.

One special means by which the economic agents seek to respond to these challenges is represented by the completion of mergers and acquisitions. These virtually represent takeovers of other companies, with various scopes, such as the elimination of a competitor, the enlargement of the product palette, the enlargement of the infrastructure, know-how and so on.

Acquisitions are nevertheless complex endeavors which have to be completed in a way that responds to business challenges (such as the integration of staffs and the alignment of operations), but also to legal requirements. The current effort then strives to research and present the more relevant legal issues that arise upon company acquisition efforts.

2. Types of acquisitions

Before assessing the legal issues with acquisitions, it is first necessary to present and understand the different types of accusations. These refer to the following:

Off market acquisitions

Hostile acquisitions

Negotiated acquisitions

Take-over of businesses.

The off-market acquisitions refer to a situation in which a company acquires another economic agent in a more private manner and in the absence of an auction. A firm that is looking to be acquired will sometimes hold auctions to assess various offers and select the best one. In the case of an off-market transaction, such auctions are not held and the acquisition is negotiated upon by the two companies alone. The off-market acquisitions then are transactions which occur outside a traditional and formal market (Encyclo Online Encyclopedia).

In the case of a hostile acquisition, the take-over effort is not negotiated by the parties, or an agreement of negotiations is not achieved. This means that the acquirer will pressure...

More commonly, a hostile take-over is characterized by the fact that the acquirer will go directly to the shareholders of the targeted company or will replace the management in the targeted company in order to ensure that the acquisition is approved (Investopedia, 2012).
The negotiated acquisitions by companies are the opposite of the hostile acquisitions, in the meaning that they are completed as a result of a process of communications and negotiations between the acquirer and the targeted company. In other words, the targeted company is decided to become part of a different company and the acquirer is interested in acquiring the respective company. The final acquisition is as such in the interest of both companies and it is negotiated and agreed upon by the two companies.

Last, the take-over of business, refers to a situation in which an interested acquirer makes an offer to take over a targeted company. This bid is aimed to convince the targeted company to accept the take over; if the targeted firm is a publicly traded one, then the acquiring company will make an offer to purchase the outstanding shares. The business take-over can be both a favorable one (friendly), as well as a hostile one, depending on the relationship between the two companies (Investopedia, 2012).

3. Legal issues

Aside from the understanding between the two companies, the successful completion of a business acquisition is also pegged to the ability of the two firms to fully understand and respect the legal issues pegged to acquisitions. In the case of national acquisitions, these issues refer to the following:

The structure of the acquisition, regulating the elements that will be purchased by the acquirer, such as stock, membership interests or organizational assets

The adequate classification of the documents and reports involved in organizational assessments, decisions and acquisition operations

The inspection of the company before the completion of the acquisition

The elimination of any potential conflicts of interests through the clear separation of the organizational and personal properties

The clarification of the purchase agreement, at multiple levels, such as the size of the purchase price and the initial deposit, licensing agreements, insurance,…

Sources used in this document:
References:

Alexon, H.B., (2010). Legal issues involving acquisition of a company. Alex on Law. http://www.alexsonlaw.com/blog/legal-issues-involving-acquisition-of-a-company / accessed on December 7, 2012

Cleaver, R., Zarraga, A. Welford, D. Dadson, N. (2011). Acquisition structures: international acquisitions. Cross Border Practical Law. http://crossborder.practicallaw.com/8-107-3925 accessed on December 7, 2012

Richards, L. The effects of merge and acquisition on employee morale. http://smallbusiness.chron.com/effects-merger-acquisition-employee-morale-3196.html accessed on December 7, 2012

(2012). Hostile takeover. Investopedia. http://www.investopedia.com/terms/h/hostiletakeover.asp#axzz2EM3IwuPq accessed on December 7, 2012
(2012). Takeover. Investopedia. http://www.investopedia.com/terms/t/takeover.asp#axzz2EM3IwuPq accessed on December 7, 2012
Off market. Encyclo Online Encyclopedia. http://www.encyclo.co.uk/define/Off%20Market accessed on December 7, 2012
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