Complex business transactions require careful consideration and special attention in order to avoid unwanted results. Poorly negotiated Mergers, for example, may lead to business litigation, wasted time and money, and a situation where neither party is happy with the resolution. In some instances, the merger may be disallowed from occurring. Therefore, when one considers acquiring a new business or buying a company, he should consult with an experienced business transaction attorney.
One situation where legal help will be beneficial has arisen with the planned merger of two stock exchange companies. The plan, which was just recently announced, seeks to combine BATS Global Markets Inc. and Direct Edge Holdings LLC, making the company the second largest U.S. stock-exchange operator in the country behind only the New York Stock Exchange. By combining the two companies’ strengths, owners hope the merger will work with their business goals and corporate strategy aimed at digital stock trading.
Though this merger plan is not expected to be finalized until next year, the legalities of the deal must be considered immediately. The conditions of the agreement can be many, and all must be analyzed. These issues may include the way the deal is structured, representations and warranties, certain indemnification provisions, and closing conditions. A slipup in any of these areas can drastically alter the outcome of the deal and may leave one side feeling short-changed. Thus, these agreements should be carefully considered by a business with an attorney by its side.
A mergers and acquisitions attorney can help a business understand the process and fully appreciate the various legalities accompanying the agreement. With an attorney’s expertise, a business can act fully informed, helping ensure the deal is closed smoothly and in accordance with the business’ desires.
Source: The Wall Street Journal, “Exchanges Announce Merger Plan,” Jacob Bunge, Aug. 26, 2013