Navigating a Hostile Takeover: How Are Employees Managed and Contracts Handled?

What is the procedure for a company being taken over by another?

Is it necessary to have a contract for the full process? And how will the employees be managed, given that many of them are dissatisfied with the new company's leadership?

Please advise. Thank you in advance.

Dear member,

Please provide more details about your query. Confirm the nature of the industry, the type of finished product or service, the size of the company being taken over, and overall, why the takeover was hostile.

Yes, whenever a company is being taken over, the integration of the employees from the taken-over company is always a challenge. However, it requires a long-drawn plan to be chalked out. The employees need to be given assurance that their services will not be terminated.

Presently, we read news about Elon Musk's hostile takeover of Twitter. Very recently, there was news "Elon Musk hints layoffs at Twitter in the future." Hints or insinuations create anxiety in the minds of the employees. Their exits should not nullify the business gains expected from the takeover.

Thanks,

Dinesh Divekar

It belongs to the gaming industry (the company creates video games). The parent company had 20 employees, and the child company had 20 employees. All of the child company's employees were taken by the new company. In addition, they had taken 3 employees from the parent company as well.

For all of this, there was no official meeting or paperwork. The company's founder is only 23 years old. He and his friends were running the child company. The founder’s friends have no shares or authority in the parent company. Without the founder of the company, the employees were approached and were asked to join the new company.

It looks like there were some financial disputes between these people, and I just joined as a new HR in the parent company. I realize that's a mess, but if someone could shed some light on it, it would be greatly appreciated. I don't have a complete picture of this (because none of them tell me the full story), but I'm trying to figure out how I can assist the parent firm, who looks to me for advice.

Thank you.

Dear member,

Your second reply is still more confusing. In the second last paragraph, you expect members to shed light on the situation. However, in the last paragraph, you have written, "I don't have a complete picture of this (because none of them tells me the full story)." Being an insider, if you are not clear about what's happening in your company, how can we, the members of this forum who are outsiders, provide suggestions?

When a company takes over another, the parent company typically does not seek the consent of the employees of the acquired company. They usually review the financial records, conduct physical asset verification, and if satisfied, proceed with the takeover.

Is it possible that the parent company began poaching employees from the child company? As employees started resigning one by one, the company faced closure, leading to the gradual takeover by the parent company.

Why is the age of the company founders of interest to you? As long as they are adults, it should not be a concern.

I would suggest familiarizing yourself with business terminologies like "merger," "takeover," etc. I have reservations about whether you have used the term "takeover" correctly.

Thanks,

Dinesh Divekar