Question for the Experts: Mergers and Aquisitions

**snaw** · 26 July 2006, 07:34

Originally posted by milanbenes

If you aquire a company, you pay x amount to buy the company, how do you stop the key staff from leaving ?

What are the best legal mechanisms to tie key staff into an aquisition deal ?

Milan.

Dunno about legal (You can't legally make anyone work for you, you can just stop them working for someone else), but usually I'd guess it's a very large pile of wonga. Anyway, for us techs it's normally the reverse - how can we make lot's of staff leave without having to give them a payout, so we can realise 'business synergies' blah blah blahllocks.

**Fleetwood** · 26 July 2006, 07:53

Originally posted by snaw

how can we make lot's of staff leave

lots

**DimPrawn** · 26 July 2006, 08:36

Originally posted by milanbenes

If you aquire a company, you pay x amount to buy the company, how do you stop the key staff from leaving ?

What are the best legal mechanisms to tie key staff into an aquisition deal ?

Milan.

Make the key staff directors of the company with share options. Then they know that after the buyout they stand to make a lot of money, hence they stay. You can't stop someone from reseigning, but you can put them on a long (6 months) notice period.

**sasguru** · 26 July 2006, 08:40

Originally posted by milanbenes

If you aquire a company, you pay x amount to buy the company, how do you stop the key staff from leaving ?

What are the best legal mechanisms to tie key staff into an aquisition deal ?

Milan.

**milanbenes** · 26 July 2006, 08:40

thanks DP,

very useful, it that as much as can be done

can you make contract where if they leave they cannot
set up business in the same field for x amount of time ?

are such contracts valid ?

someone told me they don't hold up in the EU court because the EU
court says a man cannot be stopped from making a living in the area
in which he is qualified or something like that

non-competition clauses ?

Milan.

**DimPrawn** · 26 July 2006, 08:45

It all went wrong for us business types Milan when they abolished slavery

**Phoenix** · 26 July 2006, 08:47

The question has to be why Milan?
Are you thinking of tying in the blonde Arian staff and cleansing the rest?

**AtW** · 26 July 2006, 08:48

Dim is right - Directors and such get extra big bonus if they stay for X months after acquisition _and_ it becomes their job to tell staff what's necessary in order to keep them. What they say is generally text-book answer - that things will be much better now, etc etc etc - generally enough to get same poeple going for 6-9 months after which normally first round of redundancies happens which is of course billed as "the first and the last", naturally more follow until the company is buried deep underground.

**snaw** · 26 July 2006, 08:52

Originally posted by milanbenes

thanks DP,

very useful, it that as much as can be done

can you make contract where if they leave they cannot
set up business in the same field for x amount of time ?

are such contracts valid ?

someone told me they don't hold up in the EU court because the EU
court says a man cannot be stopped from making a living in the area
in which he is qualified or something like that

non-competition clauses ?

Milan.

I'm pretty sure it's possible to stop someone leaving your firm and setting up a rival company for a set period of time, after which they can do what they want. Not sure if this has to be in the initial contract though or a general law.

Question for the Experts: Mergers and Aquisitions