Mergers-&-AcquisitionsMergers & acquisitions are the transfer of a business. Businesses are legally and practically complex and as such, transferring ownership of a business is more likely than not a complex process. Even though a standard merger and acquisition transaction may seem simple, it is actually full of complexities because you must account for all of the business’s assets, capital (human and otherwise), and legal constraints. Our Charleston business lawyers have experience dealing with these business transactions and we will account for all of the nuances.  For example: Are contracts assignable? Is a business’ intellectual property being transferred? What are the employment, tax and accounting issues involved with the transaction?

A merger  & acquisition is the transfer of a business. A business is a revenue producing asset. The transfer of a portion of a business often involves merger and acquisition law. Whether the transaction is an internal reorganization of the business or the sale of an existing business to a third party, our Charleston business attorneys guide our clients through the important considerations of a merger  & acquisition, for instance: contractual obligations, buyer and seller representations, expectations, and counsel, and time frames.

Our South Carolina lawyers do more than draft legal documents in a merger and acquisition transaction. We understand our clients’ ultimate goals and we negotiate accordingly to reach those goals. We have a lot of experience in this area of law and are well situated to provide our clients with different options in order to carry out their objectives. Just like clients vary, businesses vary; and as such, mergers & acquisitions vary as well. Furthermore, because this area of the law is heavily reliant on contracts law, there is no singular standard context in which deals are conducted.

Simply stated, mergers & acquisitions are the ways in which separate corporations become one by legally unifying their assets. Although often used synonymously and in conjunction with one another, from a legal standpoint there are subtle differences between a merger and an acquisition.

An acquisition is when one corporation takes over and absorbs another business. The target company, the corporation that is eaten up, ceases to exist, loses its identity and becomes part of the larger surviving corporation. The surviving corporation assumes the rights, privileges, and responsibilities of the absorbed company. The buyer, the surviving corporation, takes over the other company’s stock or assets and the buyer’s stock continues to be traded. Acquisitions can be “private” or “public,”depending on whether the stocks of the target company are publicly traded. Acquisitions are also often characterized as “friendly” or “hostile” depending on how the target company perceives the acquirer or buyer.

Our corporate attorneys have great experience representing both buyers and sellers in merger and acquisition deals. Contact our corporate attorneys for assistance in the sale or purchase of your business to ensure your interests are represented.
In comparison, a merger is when two separately owned and operated corporations, of relatively equal size, agree to go forward as a single unified company. When these two companies combine into a new singular business, the surviving corporation usually issues new shares of stock in exchange for the shares held in the old companies by their shareholders. This is typically known as a merger of equals. These are rare. Typically, one corporation buys another, and the terms of the deal dictate that the acquired corporation will declare it a merger even though it is really a buy out and is technically an acquisition. Purchase deals, when CEOs of two different corporations decide to join forces, are also called mergers.

Scenarios involving unwilling corporate takeovers, where the target company does not reach a friendly deal with the absorbing corporation, are called acquisitions. The real difference between the terms lies in how the purchase of a corporation is communicated to, and taken by, the target corporation’s shareholders, board of directors, and employees. Legally speaking, the differences between mergers & acquisitions lie in how the surviving corporation deals with rights and responsibilities once a merger or acquisition has occurred.

Generally, when a South Carolina corporation acquires another company’s assets, the buyer is not liable for the seller’s debts and liabilities. There are, however, exceptions to this general rule. For example: A Buyer may agree to assume all or some of Seller’s debts and liabilities in exchange for a lower sales price; “de facto” mergers, where the sale is really a merger of two businesses; scenarios where the seller is left with insufficient funds or assets to pay its debts to creditors; in scenarios where the Buyer is a “continuation” of the Seller (for example, where the directors, shareholders, and officers for the Buyer and Seller are the same or substantially the same, before and after the sale).