HR's Role in Mergers and Acquisitions

Author: Warren N. Rothman, Blue Prairie Group LLC

Introduction

A merger and an acquisition are not the same. A merger means combining two or more companies into one company. An acquisition occurs when a company buys all, or substantially all, of another company's assets, often resulting in the purchaser gaining control over the company selling its assets. In that case, post-acquisition, the purchaser will be the dominant company and the seller will be the subordinate company.

In an acquisition, the purchaser is referred to as the acquirer or the acquiring company, and the company selling its assets is referred to as the target company. In a merger, each company will commonly refer to the other as the target company. Even though a merger seems to imply that both companies will be equals post-merger, it is likely that one company will take the lead.

This guide discusses the ins and outs of mergers and acquisitions, including the key role HR plays in the process. This includes helping conduct due diligence, assessing a host of workforce issues and ensuring that the integration of the two companies goes as smoothly as possible.