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Consider leadership changes when merging with another company

Jan 5, 2021 | Business Formation

Deciding to make any type of significant change in the business world comes with risks. While the rewards may outweigh the risks in many cases, it is still important that Florida business owners understand what they are putting on the line before choosing to move forward with any substantial business move, especially if it could involve merging with another company. While mergers can have mutual benefit, it could also create a power struggle in some cases.

When companies decide to merge, it can mean that multiple people are holding the same titles and positions of leadership. For example, each company likely has a CEO that oversaw the majority of the vital company decisions, and when the companies merge, there are now two CEOs. While it may seem like a viable solution to simply have co-CEOs, that type of leadership structure typically comes with more issues than benefits.

As a result, merging companies usually have to go through a leadership transition that is not always easy. Some members may not feel comfortable relinquishing their roles, and individuals who are used to having significant decision-making power with their own company may not always agree with the ideas of leadership from the other company. Before agreeing to any company merger, it is essential to determine what leadership reconstruction could look like.

The ramifications of merging with another company can be great. Florida business owners who have been approached with a merger offer or who are considering making an offer themselves will certainly want to ensure that they are thorough in their understanding of what such a move could mean. Additionally, there are crucial legal aspects to consider that business owners will undoubtedly want to discuss with their legal counsel before making any decisions.