The term "hostile takeover" is often used to refer to certain types of mergers and acquisitions. Sadly, it gives a bad image to a process that can actually be quite beneficial to companies. In fact, mergers and acquisitions are fundamental to economic growth in the United States and overseas as well. For companies, mergers and acquisitions can mean a necessary cash infusion, larger consumer bases and important technological efficiencies.
It was recently reported in the Denver Business Journal that Colorado based National CineMedia Inc. has a deal in place to acquire one of its competitors. The company announced that it will be acquiring New York-based Screenvision, a theater and video advertising company, for nearly $375 million. The deal will consist of cash and stock and potentially set the stage for such companies to siphon some ad revenue from T.V. stations.
The merger of the two companies will result in a single theater and video advertising entity that will reach almost 3,900 theaters and around 34,000 screens nationally. CineMedia's current operation reaches slightly more than half that number of screens. According to a spokesperson for the company, the merger will put the combined company in a position to be significantly more competitive with the expanding video market and the advertising market.
Mergers and acquisitions are big business in the United States. They are also a complicated business. If a company thinks that joining ranks with a competitor may be a possible avenue towards future success and innovation, it is important to consult with an experienced business attorney. From structuring purchases to addressing potential antitrust concerns, merging two companies is much harder than people might think.
Source: Denver Business Journal, "National CineMedia to buy rival Screenvision for $375M," Mark Harden, May 5, 2014