Upon Completion

Some involved in M & A area say that the 100 days following completion of an acquisition is a crucial period for integrating the new company. There are a list of activities to complete once a merger follows through. They are commonly as follows:

• Filing Articles: To incorporate the new, combined company, file new articles of incorporation with the office of the secretary of the state in the state in which the company is registered. These documents outline the purpose of the new corporation, the names of the directors and incorporators, or founding members, and the business address of its headquarters. The documents also contain the powers and purposes of the company, as well as a broad outline of its business plan.
• Transfer of Assets: Transfer the assets and intellectual property belonging to both of the merged companies to the new company. You can do this at the same time as the accounting records of both companies are “wound up,” or finalized, and the books are closed. The accountants transfer the assets according to their current value to the balance sheet of the new company.
• Dissolution or Liquidation: Dissolve or liquidate both of the former companies. Dissolution is the “cancellation” of the legal entity, which is necessary so that the company is no longer liable for a rental lease, payment of creditors or submission of tax returns. Under dissolution, the assets are transferred to the new corporation. With liquidation, however, the shareholders vote to liquidate the company upon merging and to convert the assets of the business to cash, which they distribute to the creditors and shareholders.
• Restructuring: When a merger occurs, it is likely that both companies will have staff performing certain functions. To avoid duplication and reduce costs, layoffs usually take place and restructuring of the remaining staff is common. This helps the new company to remove unproductive workers, review job descriptions and reinvent the remaining positions.
• Rebranding and Positioning: It is an ideal time for a company to re-brand itself and reposition its offerings directly after a merger. For example, if Company A manufactures widgets and Company B owns retail stores, the merger of the two provides an opportunity for the new company to reposition as a manufacturing retailer. The company usually does this by designing and rolling out a new corporate identity and renaming its product lines in order to give the impression of a new beginning, while capitalizing on the existing reputation and clientele of both companies.