Baton Rouge, Louisiana, is home to countless businesses. All of these companies want to prosper and achieve success. Sometimes, in an attempt to strengthen its company, a business will merge with or acquire another business. Mergers and acquisitions are very common business strategies, particularly when one or both companies are having financial difficulties.

American Airlines and US Airways recently announced the merger of their airlines. The merged company will be called American Airlines. The merger, which is expected to close no later than the end of September, will result in the world’s largest airline.

The deal between the two airlines was struck shortly after American Airlines’ parent company, AMR Corp., filed for bankruptcy in late 2011. It was AMR Corp. that came to the conclusion that its best chance to compete with other airlines and for stakeholders to see returns, was to merge with another company. The merger agreement is said to allow the newly merged company to be more competitive.

In any business transaction, it is important that a company get the best deal it can. However, when it comes to mergers, it is particularly important that the acquiring company conduct a due diligence investigation of the merging company. The acquiring company will want to learn all it can about the company with which it is merging. In addition to looking into the company’s finances, the acquiring company will want to obtain information on any and all physical assets, licenses and contracts of the other company.

Businesses in Baton Rouge, Louisiana, merge with and acquire other businesses as a part of its corporate strategy on a routine badsis. While mergers and acquisitions are common business transactions, it is important that the acquiring company conduct a due diligence investigation into the other company before a deal is made.

Source: The Advocate, “Airline merger not expected to hurt BR, N.O.,” Feb. 14, 2013