Merger and acquisition are business terms that are only used and addressed by CEOs and those in managerial positions. These events will dictate the future of the companies involved. Depending on the terms and conditions, business plans and directions will change, money will be involved and people will be certainly placed in different departments or even terminated.

Although merger and acquisitions only concern owners and managers, the employees are usually the ones that are greatly affected by this movement. With little to no warning, you will end up with almost nothing since you will lose your job because of these changes. If you hear any rumor about these events, be warned and be prepared.

Mergers

A merger is basically a business transaction between two companies or businesses wherein the goal is to become one. This could happen to any businesses in any sizes. A large company could merge with a smaller one or vice versa and two companies who have the same financial status could also merge.

In a merger, there are certain agreements that the two companies would have to go through. The usual agreement between these companies is that one company will handle certain departments while the other company will handle other departments. By using the other company’s assets for productivity, their expenses will be significantly controlled. Everyone actually wins in this situation – except the employees.

During the merger, the employees of two companies will also merge. That means there are departments that will close down so that the other department from another company could do its job. There will be transfers as well as terminations.

There is a big chance that you will be transferred to another department if you have shown exceptional skill. But it is also possible that you will be terminated if the functions of your department will be transferred to another company.

Acquisitions

Acquisition is basically a business transaction wherein a company takes complete control of another company. The acquisition could be in exchange of cash, stocks or anything that the two companies agree on.

There are two types of acquisition – the normal or soft acquisition or the aggressive takeover. In the normal setting, the company to be acquired first shows their interest in selling the company to the highest bidder or to someone they prefer. The transaction is smooth as two companies are aware on what they need to do.

The aggressive or hostile takeover on the other hand is a business transaction wherein the buyer declares its intentions of taking over the company even though the other party didn’t show any intentions of selling. The company who will take over will offer a very lucrative price on the company that the other company will have no choice but to sell. That is why hostile takeover usually happens to powerful companies. They see their growth not by merely establishing another department but by taking over another established company.

During the acquisition, two scenarios could happen to you as an employee. The first scenario is that you will have to deal with the losses immediately if you are in a company that will be purchased. On the other hand, you will be keeping your job if you are the larger company. This would even work to your advantage since the company will exponentially expanding with a new company and you might be assigned to another task, with promotion of course.

Mergers and acquisitions are two things that you should be concerned of during these times. Always be alert on the latest news about the company so that you’ll know your future and your chances of continuous employment.