Merger Project: Internal Memo Analysis and Report - Business Law UK

This report analyzes an internal memo regarding a merger project, focusing on the legal and business aspects of mergers and acquisitions. The memo discusses the benefits, such as increased market share and efficiencies, as well as potential drawbacks, like high costs and negative market reactions. It highlights the role of the Competition Act 1998 in regulating market dominance and preventing anti-competitive practices. The report emphasizes the importance of understanding the legal framework and the impact of mergers on competition and market dynamics. The analysis includes a reference to Townley (2010) to support the discussion on the goals of the UK's Competition Act. The report aims to provide a comprehensive overview of the merger project, including the legal and business considerations involved.

“Business Law Consulting UK”
Internal Memo
To : Fellow Intern
From : Fellow Intern
Re : Interest of intent to be included in the Merger project
Date : 16/12/2019
Mergers and acquisitions play a fundamental role in the business environment. It entails the process
of combing two or more companies into one to achieve synergy with greater dominance n and
stability. Mergers materialize when two companies join forces, occurring with companies being of
the same size and with sizeable advantage on sales, efficiencies, and strengths.
Acquisition on the other end occurs when a company buys another company and merges it into its
operations. The purchase herein can be friendly or hostile depending on the ensuring circumstances.
More often the result is the same but differences occur on either type.
The potential benefits of combining forces entail aspects of efficiencies and capabilities. There is an
improved economy of scale; this offers an opportunity for the acquisition of higher quality services
and client base. It enhances market share, pooling resources together is an essential aspect for
larger market share. There is an increased ability to carry out the distribution of resources, reduced
costs of labor, improved talent base and a larger pool of personnel, enhanced financial resources
which make the new entity to make new investments.
Despite these potential benefits, there exist potential drawbacks. There are large expense uses in
the buying process, higher amounts of legal costs, opportunity costs emanating from forgoing other
deals and the possibility of negative reaction which can impact the stock price index.
The Competition Act 1998, offers an avenue and framework for the identification and dealing with
restrictive practices for businesses and abuse base on market dominance. This led to the
harmonization of the UK and EU competition policy. There is a prohibition on companies that distort
competition through horizontal agreements. The Competition Markets Authority has the
responsibility of prosecuting these cases, further, the Act deals with the prohibition on abuse of
dominance such as predatory pricing, supply decline, increased prices and discriminating on prices
for skewed benefits (Townley, 2010).
These laws are essential in guarding merger and acquisition deals against market players. There is a
need for your inclusion in this project to broaden the scope of these aspects and make a case
analysis for either proposition or opposition of the merger project.

“Business Law Consulting UK”
References
Townley, C., 2010. The Goals of Chapter I of the UK's Competition Act 1998. Yearbook of European
Law, 29(1), pp.307-360.