Acquiring another business can be a good strategy to grow quickly as well as creating an opportunity to increase the market share, the geographical reach of the business, and improve the company’s economies of scale… but what are the legal implications of taking over a business?
Hotline Bling…details of the BT takeover
Telecoms giant BT recently got the all clear from the Competition and Market’s Authority to proceed with its takeover of EE. The CMA stated it did not envisage that BT’s takeover of EE would hamper any markets of the UK in terms of competition much to the dismay of rivals such as Vodafone. For a staggering £12.5 billion, the deal will see BT reinforce is dominance as the leading UK telecoms company and continue to increase value to a brand that is the UK’s 4th most valuable. Even as the 64th most valuable global brand, this huge takeover may appear unnecessary but it aligns with BT’s vision of growing in a constant and sustainable way as they seek to make the world more connected. The takeover would help to boost BT’s presence in the mobile markets considering EE’s current 33.8% share and its nationwide 4G coverage.
Interested in acquiring a business?
There are numerous things to consider when acquiring a new business, but before the acquisition gets started any prospective buyer will need to carry out due diligence. Knowing your own business as well as your potential acquisition is vital in determining whether or not you are a good fit to begin with. Remember that buddying up might always be attractive to the expansive entrepreneur but mere friendliness won’t compensate for poor financials.
Carrying out your due diligence will help you understand how any takeover will impact on your market position which may be vital in navigating any concerns of regulatory bodies. As with the BT takeover, bodies such as the Competition and Markets Authority may stand in your way as they seek to ensure fair competition and avoid monopolies.
Assessing how any takeover will impact on your market position is not only a key element of understanding suitability but also important in how you negotiate an acquisition. Having a strong position at the negotiating table may dictate how successful your acquisition is and may dictate how you structure your business post-acquisition as well as how you manage your assets and liabilities, organise your staff and protect your intellectual property rights.
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If you are thinking about taking your business to the next level, our corporate team are well versed in helping a business succeed with its acquisition and can help guide you through the process. Unlike a traditional law firm, we don't charge by the hour and we won't charge for each phone call or email. Instead, all of our fees are fixed and agreed with you upfront.
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By Louis Muncey.
The contents of this article are intended solely for information purposes only and should not be construed as legal advice or financial advice or opinion in any specific facts or circumstances.
© 2015 Hybrid Legal Limited.