When businesses join together to effectively use their resources and connections, they enter into what is known as a merger. While there are many benefits to company mergers, individuals within the companies may have questions regarding how this new shift will affect their finances and responsibilities. Shareholders are one of the groups that will require thorough communication on how the merger will impact the current shareholder stakes and equitable value.
Most mergers combine companies roughly around the same size, while an acquisition is the purchase of a company by a larger entity. In order to have an equivalent and fair exchange, mergers will often exchange shares rather than physical money to solidify their connection. Here are a few of the complexities of mergers and how they affect shareholders.
5 Ways to Prepare Your Shareholders for a Company Merger
A merger may provide significant benefits for both companies with new connections, resources, and an introduction into new markets. One way to make the transition smoother is to prepare your shareholders for the change.
Consider the following ways you can prepare your shareholders for a company merger:
Know Your Shareholders
Your investors are essential for the success of your company. Whether they are a common or preferred shareholder, identifying their interests, and tailoring your conversation to those specific needs will help them understand their standing in the transition. You may need to convince them that this merger will positively affect the company and its profits.
Prepare a Thorough Overview
A simple slide deck or overview can be used to explain the details of your merger, the benefits of the transaction, and all the necessary information your shareholders may need to understand the transition. An overview will answer your shareholders’ questions and prepare them for the change.
Plan for the Future
Your company shareholders will always be interested in what the future holds for your company. Having a plan depicting how your merger will affect and benefit the company will allow shareholders to understand how this transition will positively impact your company’s future.
Drive a Successful Announcement
Once you have a clear understanding of your shareholders and have all the steps to reassure their concerns, you’ll need to build a consistent and influential message that will clearly announce the deal to your shareholders. Your company will widely communicate this message, so all your shareholders receive an overview of the merger and its benefits.
Preparing your shareholders is one step in the merger process. While a company merger can significantly benefit a company, there are a lot of vital steps that require legal guidance. Contact a lawyer to learn more about the merger process and how they may help you.
Contact an Experienced Utah Merger and Acquisition Lawyer Today
Our goal at Cardon Law is to make sure our clients have highly-qualified legal counsel and representation. Jeffrey Cardon has over 15 years of experience protecting the rights and interests of his clients. Across Utah, business owners, executives, investors, and many other professionals trust his judgment and knowledge. Jeffrey Cardon understands that every company merger is unique and tailors his services to the needs of his clients.