Content area
Full Text
Every day newspapers across the country carry news concerning corporate mergers and acquisitions. The volume of mergers and acquisitions appears once again to be on the rise, with 1993 being the biggest year for mergers and acquisitions since the merger-mania years of the late 1980s. [Schifrin, Matthew, "The Deal Business Wakes Up," Forbes 152 (August 2, 1993).]
Behind every headline, there are teams of corporate officers, attorneys and paralegals who work to make the mergers and acquisitions happen. The corporate paralegal is a very important part or each team. If you are involved with corporate mergers and acquisitions, you will probably find it the most exciting, and the most challenging, part of your job.
TYPES OF CORPORATE MERGERS AND ACQUISITIONS
There are numerous methods for purchasing and combining corporations. The most common methods are mergers, consolidations, and stock and asset acquisitions.
* Mergers are the combination of two or more corporations whereby one corporation survives and absorbs one or more other corporations which are then dissolved.
* Consolidations are the merger of two or more corporations into a newly formed corporation.
* Asset acquisitions involve the acquisition of all of the assets and assumption of liabilities of the target corporation.
* Stock acquisitions involve the purchase of all or substantially all of the outstanding stock of the target corporation, usually by another corporation.
The steps outlined below focus on corporate asset and stock acquisitions; many of these same principles, however, apply to mergers and consolidations.
LAWS GOVERNING CORPORATE MERGERS AND ACQUISITIONS
Specific requirements for mergers and consolidations are set forth in the statutes of each state. State statutes also prescribe the necessity and method for obtaining shareholder approval of the sale of the corporation's assets outside the normal course of business. Corporate stock and asset acquisitions are generally not governed by state statute; however, any type of corporate merger, consolidation or acquisition may be subject to federal antitrust and state and federal securities laws. Attorney and paralegals specializing in antitrust and securities laws are often responsible for researching and complying with the pertinent laws relating to corporate acquisitions.
THE PARTIES TO A CORPORATE ACQUISITION
Corporate paralegals are instrumental in every step of the corporate acquisition, including reviewing the acquisition agreement, preparing an acquisition checklist,...