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Dallas Business Lawyer Reviews Largest Mergers of 2018

Dallas business law attorney, Richard “Ric” Armstrong, explores what Texas business owners can learn in 2019 from some of last year’s largest M&A transactions.

2018 was a banner year for Mergers & Acquisitions (M&A). By as early as July, corporate mergers had broken records with $2.5 trillion in transactions, according to the New York Times, and the trend only continued into the third quarter with $3.3 trillion in transactions by September—more than 39 percent more than in 2017. If you’re a business owner thinking to acquire or merge with another company this year, let’s explore some lessons we can learn from some of last year’s most significant mergers.

T-Mobile and Sprint

In June 2018, T-Mobile and Sprint, the nation’s third and fourth largest cell phone carriers, applied to the FCC to approve a merger of the two companies under the T-Mobile masthead—a transaction worth nearly $60B. T-Mobile is backing its request by promising to add 200,000 jobs to the workforce and claiming the merger will enable it to be the first company to offer true 5G service. The merger is expected to be completed in the first quarter of 2019.

Takeaways: In any merger, patience is a virtue. These two entities have been discussing a merger for several years, and although they may actually complete it ahead of predictions, there have been a few hiccups along the way—not the least of which was the FCC’s pause of the 180-day review window citing the need for further review of the transaction. In any M&A transaction, take nothing for granted and be prepared to wait. Rushing the details may only lead to problems down the road.

Cigna and Express Scripts

In March of 2018, one of the nation’s largest health insurers (Cigna) and a pharmacy benefit manager (Express Scripts) announced a merger worth approximately $52 billion. All signs pointed to a smooth transition when the Justice Department signed off on the merger in September. However, weeks before the expected December 8 closing date, the companies filed paperwork delaying the close date for six months pending approvals for a change of control in three holdout states.

Takeaways: The closing date is almost never the closing date. M&A transactions have a lot of moving parts, which means wrenches can be thrown into the process even at the last minute. Even small businesses should remain flexible and financially prepared to withstand unexpected delays.

Before entering into any M&A transaction, consult with an experienced Dallas business law attorney to make sure all your legal pieces are covered. Call Armstrong The Law Firm, P.C., today at 972-424-L-A-W-S (5297).

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