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August 20, 2008, 2:39 pm   

Risks and Benefits

What are the benefits of a merger or an acquisition?
Both mergers and acquisitions can generate long term profitability for the combined company in the case of a merger, or the purchasing company in the case of an acquisition. M&A can also assist an evolving company with its growth and development or generate a smoother production process or operational system. These characteristics are not always the case and other benefits or risks are always involved in every unique M&A. George and Company can assist in defining all variables, risks, and benefits of your personal and unique business decisions. 
 
What are the risks involved with a merger?
A merger does not always generate success. Sometimes mergers result in a net loss of value because of problems that arise in the combining of forces whether through technological incompatibility, unnecessary employees or equipment, poor management, etc. This often results in confusion among new management in the decision making of which staff to keep and which operations to uphold. In order to create a successful merger it must be well researched, maintain the employee environment, and in the case of larger companies it must increase shareholder value quicker than if the two companies were still separated.
 
A second risk involved with mergers is monopoly concerns. The European Commission, the United States Department of Justice, and the US Federal Trade Commission have the power to deny a merger in anti-trust cases that signal a monopoly or a negative impact on the market. Again this is the case for the merge of larger companies. Smaller business mergers do not necessarily share the same risks. George and Company can assist in determining the risk and benefits of any merge or acquisition and clarify each step to be taken to ensure a smooth and professional process.
 
What are the risks involved in an acquisition or takeover?
Business acquisitions or takeovers share many of the same risks as a merger in the sense that when a second company is purchased new management has to reconfigure the employee environment and operations among other things. Risks involved with the purchased company such as past and present debt, problems, assets or liabilities are “baggage” that must be addressed by the new owners and management. George and Company will assist in identifying risks involved with a merge or acquisition by adequately valuating any business involved.
 
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