Business owners know how fierce the competition is in their market. In central business districts like Denver, Colorado, local residents may notice that many companies follow different practices in order to continue to expand their wide array of services that are offered to consumers. In times of economic depression, stakeholders and business owners also use different methods, such as mergers, to avoid a complete collapse. Mergers and acquisitions are a great way to maintain a well-established business and to minimize competition by combining two companies into one.
Telecommunication companies T-Mobile and Sprint are planning to merge in a $32 billion deal, which they hope will give them a larger portion of the industry here in the United States. The reason behind the merger is that the two largest competitors in the telecommunication industry, Verizon and AT&T, continue to acquire more customers, giving them a greater share of the market. Under the deal, Sprint plans to acquire T-Mobile by paying an estimated $40 per share in cash and stock.
Before the deal is signed, it will undergo a strict screening and review by regulators to fully understand the merger's merits. If the regulators find out that the deal would limit the choices consumers have, the deal is less likely to go through. However, the success of the merger depends on how the two parties will create an agreement that will benefit both ends.
Here in Denver, business owners who are planning to enter a merger or acquire another company should choose to use legal experts to help them weigh their decisions before entering into an agreement. By doing so, they will have plenty of time to cancel the deal or draft an agreement that is more beneficial for the company.
Source: The New York Times, "T-Mobile and Sprint Zeroing In on a $32 billion merger," David Gelles and Michael J. De La Merced, June 4, 2014