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Shareholders can benefit from mergers

From agricultural businesses to the service industry, the United States is home to a multitude of different types of companies. Despite differences in specific business goals, the common goal of all businesses is find success. Sometimes, in an attempt to improve the strength and success of a business, Louisiana business leaders will pursue a merger or acquisition.

The shareholders of Robbins & Myers, a Texas-based equipment manufacturing company, recently gave company management the green light to merge with National Oilwell Varco. Roughly 86 percent of the company's shareholders approved the merger agreement.

Subject to the details of the closing, the agreement will result in Robbins & Myers becoming a wholly-owned subsidiary of National Oilwell Varco. Additionally, as part of the agreement, Robbins & Myers' stakeholders will actually receive compensation for every outstanding share they own.

It is always important that a company get the best deal it can out of any business transaction. When entering into a merger or acquisition, however, it is especially important for the acquiring business to conduct a due diligence investigation of the company it seeks to absorb. Such an investigation includes obtaining information about the physical assets, licenses, insurance coverage and any pending litigation involving the target company.

Businesses in Baton Rouge merge with and acquire other businesses as a part of a larger, long-term strategy. While mergers and acquisitions are common business transactions, certain steps can be taken to ensure that the transaction proceeds without a hitch and all parties meet their business goals.

Source: Dayton Business Journal, "Robbins & Myers shareholders approve merger," Joe Cogliano, Dec. 27, 2012

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Dale M. Maas, Attorney at Law
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