KH friends, have you heard the issue of decacorn Gojek merging with e-commerce giant Tokopedia? If it really happens, you could say that the company will be unmatched.
What is a Merger?
So, what does merger mean? In short, a merger is the amalgamation of two or more companies into one new company. A merger results in the assets and liabilities of the merging company being transferred to the surviving company. The legal entity status of the merged company ends by operation of law.
Advantages of Mergers
This merger or merger certainly provides benefits, you know. What are the benefits? Let’s see below!
- Adding Funds or Capital Two companies that merge can increase the amount of company funds. The funds can be used as capital to expand the business. If the company becomes bigger, the company’s borrowing power will also increase.
- Giving Birth to Synergy More benefits will be felt by both companies that do the merger. One of the reasons is the synergy created by the parties because they work together. The realization of this synergy can be seen clearly from the value of the company and the revenue that becomes greater than before the merger.
- Business growth will be faster. Suppose the merged companies are companies that have similar products or services. Access to a larger market will be very easy to obtain and the target consumers will be wider. This will reduce the possibility of loss in running business activities.
- Increase Efficiency For assets that are difficult to acquire, mergers are a way to get them. Usually, it is related to technology. Companies that do not have the technology can merge with companies that do. Thus, skills in digitalization can be acquired and efficiency in conducting business activities can be achieved.
- Increased Competitiveness Companies that merge into one will have stronger competitiveness in the global scope. In addition, mergers also help companies from being taken over (acquired) by other companies. Presumably being acquired, the company becomes a bigger and stronger entity.
- Increased Liquidity The joining of two companies creates greater liquidity as shares are easier to acquire. A company that initially has less liquidity can merge with a company that has better finances. That way, the company will not experience bankruptcy.
Read also: Gojek and Tokopedia Officially Merged into GoTo!
KH Contact
Mergers are arguably simpler and less costly than acquisitions. However, mergers cannot be done automatically. There are documents to be created and procedures to be followed. Make sure all these requirements are met so that the merger is legally valid. If you are planning to do a merger but are still confused about what to do, just contact Kontrak Hukum. We provide the fastest, easiest, and most affordable service. Call and visit:
