Our business is in providing assistance to national and international companies to overcome their problems and to succeed.
The consistent strain of trying to make a business work is often balanced with an element of risk that can lead to bankruptcy and eventual closure. Larger corporations have an additional onus that the day to day running of the business falls within legal parameters, financial restrictions, political and social limits, and even cross-border complex issues.
This is where CDN Law Firm can step in with our expert advice on audits, tax and advisory services and can deliver a complete compendium of multidisciplinary and financial and accounting skills and expertise that adhere to worldwide standards and are based on a true understanding of the industry.
Here at CDN Law Firm we ensure the best level of service in your acquisitions, we balance this with a close understanding of your outcomes, and we guarantee your returns.
What We Do
The Main Idea
“One plus one equals three” has been a phrase that is often bandied around in the world of mergers and acquisitions since the beginning. It simply means the bringing together of two separate entities to form one larger and improved company. And the result of this has to be that the two companies together are much stronger than separate.
This ethos is a magnet to many companies especially those that are under performing. Successful and stronger organizations will move in to buy others in an effort to gain a more competitive, cost-efficient firm. The idea is appealing to both firms involved as it normally attains greater market share and greater operating fluency. Because of the perceived benefits, the firm getting taken over is mostly in favour of the general idea as they know they probably could not exist without the deal.
What’s the distinction between Mergers and Acquisitions?
Often bandied together as the same thing there is a rather important distinction between a merger and an acquisition. When one firm buys another and clearly states it is the new owner then this is an acquisition. Legally the purchased firm stops trading and no longer exists, the buyer takes over their
whole business and then stocks can be traded of the new company.
The difference in a merger is that two firms (usually of similar size) decide to join together and progress as one new company and no longer two, the exact term for this is a merger of equals. Both company’s stocks are surrendered and a new company stock is released. A good example of this was when Daimler-Benz and Chrysler merged forming Daimer Chrysler.
A merger of equals does not happen that often, mostly one firm will simply buy another but may allow the purchased entity call it a merger. The reasoning behind this is that often a buy out or acquisition has negative connotations, thus classing it as a merger, eases the process for employees and management.
When two entities have a mutual agreement that their businesses should join together, for the benefit of both partners, then this purchase agreement can also be called a merger. If one of the sides is against the proposal then it is considered as a hostile gesture and is an acquisition.
The whole ethos of what the actual takeover is called, either a merger or an acquisition, depends on how the union has been announced to the market, employees and shareholder. In explanation, it all depends how the purchase is communicated and also received to everybody concerned.
Synergy is the key to the success of the new company that is formed. Without it then any of the associated benefits will not happen, such as cost efficiencies. The following are the main benefits expected when companies merge.
Staff reductions – One of the most feared results of a merger is job losses, and the cutting down of staff. But duplication of most administrative jobs is needles, so is two managements. This can be handled in a way for everybody’s benefit, quite often new positions come about when firms join together, and early retirement and generous payoffs ease the pain.
Economies of Scale –Already mentioned, economies of scale are one of the biggest benefits of a larger firm. A bigger company has more buying power as their orders are generally larger, therefore they can drive negotiations hard with their suppliers on everything from raw material to capital equipment.
Acquiring New Technology – To stay ahead of competition it is often through the avenue of technological advancement. To develop slicker operating methods and reduce labour hours, sometimes a larger company will purchase a smaller one just for their advanced technologies.
Improved Market Reach and Industry Visibility – Firms also merge to give a wider range of markets and a more diverse customer base. By merging firms can flatten out marketing and distribution on a wider scale, thus giving them new sales prospects. The bigger and more successful company will have better market credibility and have better prospects of raising future capital than smaller firms.
Having taken all these benefits into account, synergy does not always come easy, it does not just happen because two companies join. Mergers handled correctly do generally bring benefits, but on occasion they do fail, and one and one do not always make three.
It is an unfortunate fact that the ideals of synergy stay in the boardroom and with the planners. The market generally sees through schemes of persons who have most to gain from a successful merger and acquisition contracts, and therefor gives the firms involved penalties by giving it a lower share price. Here at CDN Law Firm we are open to all the variations that make mergers and acquisitions fail.
Varieties of Mergers
Most mergers follow the same pattern with one or two variations, below we discuss different kinds of mergers that are recognized by the relationship between the two businesses that are being joined:-
- Horizontal Merger – A horizontal merger is when two entities combine that are in the same markets and produce the same product or service.
- Vertical Merger – A vertical merger is normally down the supply line, a car manufacturer may purchase a tyre company for example.
- Market-Extension Merger – This is when two companies sell the same products or services but compete in different markets.
- Product-Extension Merger – This is the reverse of the former, the two organizations compete in the same markets together but offering different products or services.
- Conglomeration – This is where two firms have nothing in common but one thing, the consumers are the same.
The way a merger is actually financed and conducted throw up different types of mergers, there are two main kinds and each has a consequence being that the business is productive and so are the financiers:
Purchase Mergers – A purchase merger is exactly as the term is written. One firm buys another and takes over the business. The purchase is cash funded and through the consequent change there is a sort of financial responsibility, this merger is taxable. Acquiring companies normally prefer this type of merger because the tax benefit could be significant. Purchased assets might be written up to a price that is actual with the distinction between the guide evaluation aside from the price of the assets annual depreciation, thus minimizing tax duties that may be payable by the organization who is the purchaser.
Consolidation Mergers – In this type of merger, an organization is formatted that is new, the two former entities are thus joined under a new banner and a brand new name. The same tax implications apply to this kind of merger as a purchase merger.
An acquisition can differ from a merger in the case of one organization buying another. Similar to mergers, acquisitions are made to benefit the situation, they happen when firms seek economies of scale, efficiencies and greater market exposure. Every acquisition involves one organization buying another, there is no change of stock or unification of a new business being formed which is totally different to mergers. On the whole acquisitions are normally favourable, and both side are generally happy with the deal, however they can be acrimonious.
The mechanics of the actual purchase in an acquisition is similar to mergers in that it is normally cash generated but stock can also be utilized. In some high street deals in addition to cash properties are also included, so when firm A buys firm B cash and property are involved and the purchaser will then move into the other stores. Firm B ceases to exist and the stock is closed, perhaps starting up a new company with the purchase funds.
Another type of acquisition is what is termed as a reverse merger, this give an opportunity for an organization to get publicly-listed in a relatively short space of time. This means that a well-functioning and profitable private company will purchase a public company just to get the status of a shell-company. The buying firm can now trade stock openly on the market.
Whatever the actual mechanics of the merger or acquisition deal and how it was funded, there is one main goal that is common. And that is harmony and synergy are achieved and thus the new business is better and more valuable than the sum of the two previous organization. Synergy is the key for this success.
Here at CDN Law Firm we have a Mergers and Acquisitions team that has all the legal expertise needed across the board. We know that a merger or acquisition throws up many complicated problems and we empathize with our clients. We also give transactional advice that will support you to achieve your goals both here and internationally. CDN Law Firms’ Regulation has one of many primary Media Legislation practices in the nation and also includes a Media Mergers and Acquisitions team that functions as a consultant that is leading all types of news industry acquisitions.
CDN Law Firms primary function we be to formulate all our expert knowledge and collate it for the benefit of our clients and the markets. Our partners also offer our client base with a worldwide network to support financial and also accountancy solutions, with the benefit of a deep knowledge of the market.
What CDN Law Firm can produce rules the way we operate, behave and interact with clients. Our inside knowledge helps us to determine how we can best do things, and lay out parameters that enable us to work in harmony in a satisfying and most reliable manner. In turn this philosophy enables us to enrich society that is based around the CDN Law Firm network.
CDN Law Firm play a vital function that is for the benefit of the money markets, whilst doing so we are also active in implementing reform within both our market which boosts reputation and confidence. We consider business ethics as the corner stone of society today, and we strive to make a real difference in the areas that we are concerned in.
What We Stand For
CDN Law Firm are a global company and our customer base are from clients dotted around the continents. We represent them all their transactions and most of all protect their intellectual property. We have represented clients from Europe, Asia, the Middle East and Latin America. Our wide range of assistance and aid encompasses many areas such as global brand protection to multi-country mergers and acquistions.
We are just as adroit at handling relatively small two person start-ups as representing Fortune 500 companies. You can be assured whether you need to formulate a start-up, or negotiate mezzanine or seed finance, or perhaps you need the professional handling of initial public offerings and mergers and acquisitions then CDN Law Firm are the team for you. We also offer strategic pre litigation counseling and representation in adversarial proceedings.
Who We Are
Our People – It is CDN Law Firm policy to draw our team of employees from a wide background of skill bases but they all are bound by a set of shared ideas and morals. By working with us they can learn and expand their portfolios, and we encourage the best out of every individual to take them to the next level. By doing this it gives the company depth without limits and a wide ranging depth of knowledge, this in turn enables us to offer a comprehensive advisory capacity, vast experience, ideas and the capability of taking any job on.
Our Leaders – The team is guided by a management that focus on company goals and ideals, they lead and drive the company forward. They are aware the high value of development both in employees and levels of service, they strive to give worldwide consistency that CDN Law Firm are famed for.
Our History – Two hundred years ago the roots of the company were started, with a history of providing fine work for numerous large companies involved in mergers, and their own member firms since 1943. The CDN Law Firm law firm as it is today was formed eight years ago by Phillip Starck and is very much a global company, with a partner network stretched around the world.
Our Philosophy – CDN Law Firm are all about good corporate governance. We understand that it is critical that everybody is responsible for their own actions and their effects, so it is critical that we keep our independence and objectivity. We also dedicate ourselves to promote and take on board change for the better, and to also help our clients along the way to follow good business practices and in tandem increase company value from stockholders.
By being a worldwide company the significance we put on Global Industry gives us a vital insight into knowing about our client’s business and what we have to have available to service their needs, that could be industry specific and detailed.
CDN Law Firm always work to the guidelines governing capability and consistency. Working and helping there global companies wherever they may be based giving them tailor made service and quality.