What considerations are important for merging companies?
Regulators in Maryland and Delaware recently approved a merger between energy companies Exelon Corp. and Pepco Holdings. The companies need one more approval from the District of Columbia before moving forward with the merger. The proposed merger is worth $6.8 billion and affects energy companies in those states.
Maryland regulators imposed a number of conditions for the companies to consider before signing off on the deal. The companies quickly considered those conditions and agreed to comply with all of them in order to proceed.
Many of the conditions imposed by the regulators had previously been discussed between the companies in the initial talks on the merger. Maryland regulators delayed a decision from March to address concerns that the merger did not seem beneficial to customers. According to Exelon president and CEO, Chris Crane, although the conditions pose a challenge, the companies are willing to work on them in order to grow and expand their roles in Maryland. The conditions included higher reliability standards, rate credits for some customers and energy efficiency programs in some Maryland counties. The company will have to strictly adhere to some of these conditions or face fines for noncompliance.
Business mergers can be important when growing your business and increasing your role or services in other communities. Depending on the type of business, a merger between two businesses might face board approval, potential regulatory issues and community approval. Understanding the laws involved when merging a business, from purchasing property to name changes, takes time and requires extensive knowledge. While some considerations in merging a business seem simple, such as a new name or new logo, other considerations have a larger impact such as if the company will sell stock or relocate. A business should consider the effects of the merger on its employees and customers in addition to the bottom line in order to be successful.
The business and corporate lawyers at Longman & Van Grack have extensive experience in successfully helping businesses merge and stay compliant with relevant laws and regulations. We have offices in Bethesda and Rockville, Maryland, and serve clients throughout Maryland, Washington D.C., Virginia, Massachusetts, and California. Contact us today at (301) 291-5027 for a consultation.