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What are the signs of a friendly merger?

On Behalf of | Nov 13, 2018 | Mergers & Acquisitions

When one company buys another company in Florida, it sometimes is hostile. These are the mergers we so often hear about because they often involve litigation and drama that piques people’s interest. However, many times when two companies become one, it is an amicable situation. This, according to Dummies.com, is called a friendly merger.

In a hostile takeover, one company forces the other company to sell out. The company being taken over is not happy. They do not work with the other company. There are many disagreements. People usually lose their jobs.

With a friendly merger, as the name suggests, everyone is on board with the combining of the companies. If your company is taking over another company, you will work together to hammer out the details. You will ensure everyone agrees on any changes and do what you can to ensure job loss is minimal. The merger usually makes sense to everyone. For example, one company may be facing financial distress but merging with the other company allows it to stay in operation. In the end, everyone is happy with the results of the merger.

When companies merge, the atmosphere is important. Hostile takeovers often create a very bad atmosphere, whereas a friendly merger typically allows business to go on as usual with a content atmosphere. In some cases, a friendly merger may even improve the atmosphere, such as in a case where the merger will save one business. This information is for education and is not legal advice.