Keys to the Successful Acquisition of a Foreign Company
Ronald Prague, Executive Vice President and General Counsel, Synchronoss Technologies Inc., USA
Your CEO comes to you and says the company is considering acquiring a company in Europe. What do you do? First of all, you need to determine why your company is considering this acquisition. There are a number of reasons why a company may decide to pursue a foreign acquisition. By acquiring a foreign corporation, a company will be able to expand geographically and achieve greater diversification by establishing or expanding its presence around the world. This may change an investor’s perception about a company’s size, growth or stability. Other considerations could include increasing revenue, achieving greater market share, synergy of product and service offerings, acquiring desirable technology and products, transferring resources or seeking to achieve economies of scale. In addition, an acquisition may be driven by tax implications, financial restructuring, defensive manoeuvres to prevent a takeover, competitive or pricing pressures or a change in a company’s overall business strategy.
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