Abstract
More often than not, the topic of employee benefits is put on the back burner during merger and acquisition negotiations. At best, it is a passing statement buried in the legal contracts. However, the issue of employee benefits in a merger or acquisition deserves a prominent seat at the bargaining table from the very beginning. This will not only ensure a smooth transition for both the employer and employees but will reduce the chances that costly miscalculations will be made. For example, assume health benefits of the buyer and seller are identical, but the buyer pays 60% of the premium whereas the seller pays 100% of the premium. This can have a tremendous impact on the cost of providing the benefit. The same comparative analysis should be done for every facet of the buyer’s and seller’s retirement and/or 401(k) plans, welfare benefits, payrolls, stock options and third-party providers.
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