United Financial Bancorp, Inc., has announced its acquisition of New England Bancshares, Inc. The corporations are the parent companies of United Bank and New England Bank, respectively. The business sale has been completed successfully, giving United Financial Bancorp control of all the stock of New England Bank.
United Bank currently holds more than $1.6 billion in assets; it has branches in central Massachusetts. This business transaction was a complete merger, in which United Financial Bankcorp absorbed all of the outstanding stock of New England Bank, rather than a partial merger, in which New England Bank would have retained some control over its own assets.
There are many reasons why a company may choose to participate in a merger. In some cases, the larger company that absorbs the smaller one has more assets and more control in the industry in question. However, some mergers are simply done to consolidate the power of two smaller players in a competitive market. In some cases, two small companies can merge and become more powerful than a large competitor, whereas the companies individually would have had little chance of competing with the larger business.
As with any business transaction, a merger can involve complicated legal documentation. A business lawyer is usually the best choice for this type of contract work, especially one who understands the complexities of merging large corporations. A successful merger must take into consideration the stockholders, creditors and all other entities involved with both businesses. A business attorney can ensure that all documents relating to the merger cover the legal problems that can arise in a complex transaction of this type.
Source: Worcester Telegram & Gazette, "Business briefs: Merger completed," Lisa Eckelbecker, Nov. 17, 2012