© Copyright Acquisition International 2025 - All Rights Reserved.

Article Image - A Deep-Dive into Mergers & Acquisitions in the Age of Mass Tort
Posted 7th August 2023

A Deep-Dive into Mergers & Acquisitions in the Age of Mass Tort

Mergers and acquisitions are a part of business growth, with the former allowing businesses to join arms to increase their financial muscle power. In contrast, the latter allows businesses to buy out their competition or diversify. While they come with advantages, they also come with the risks of buying into a company headed for a […]

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

A Deep-Dive into Mergers & Acquisitions in the Age of Mass Tort

Mergers and acquisitions are a part of business growth, with the former allowing businesses to join arms to increase their financial muscle power. In contrast, the latter allows businesses to buy out their competition or diversify.

While they come with advantages, they also come with the risks of buying into a company headed for a mass tort which can significantly impact your investment.

This guide looks into the complexities of mariners and acquisition in the age of mass tort and how to go about them, so keep reading for a comprehensive insight.

Understanding Mergers and Acquisitions

Mergers occur when two or more companies agree to combine operations to become a single entity. It involves negotiations among the entities, including approval by shareholders and regulatory bodies.

Mergers usually involve smaller companies coming together to get on level ground with a typical competitor. By coming together, the smaller entities have increased their combined market share and efficiency in operations, which helps them stay competitive.

Acquisitions

Acquisitions involve buying off another company. The dominant player in the industry often employs this strategy and often aims to eliminate competition. However, it can also help diversify into slightly different areas, access new markets, or bring in fresh talent

Impact of Mass Tort on Mergers and Acquisitions

A mass tort occurs when many claimants file a civil suit against one defendant at the same time. For example, a water bottling company selling contaminated water affects many people simultaneously and consequently gets sued by many people at once.

Sometimes, the harm caused by a defective product is not immediate, so you could get into a merger or acquire a company while the trouble is brewing. For example, suppose the water problem in the above example causes damage over time, but the damage is only apparent after several months or years of consuming the water. You acquire the company just before the damage comes to light. As the product manufacturer, you will have liability for a problem you did not cause, which would mean you lost money in the merger or acquisition. 

In the past, class action and mass tort litigation news were not as common. Today thanks to increased awareness of consumer rights, liability lawsuits are becoming pretty common, with some mass torts settling for billions of dollars.

Strategies for Navigating Mergers and Acquisition in the Mass Tort Age

Exercising Due Diligence

Like everything else involving huge investments, exercising due diligence is key before a merger. First, investigate the target company’s past and pending lawsuits to understand how diligent it is at avoiding lawsuits.

A few liability lawsuits in the past are not necessarily a red flag because every business will have a few over time, but if they are more than what you would deem normal, you need to consider whether moving forward is the best idea. 

Engaging Specialized Legal Counsel

Your investigations alone may not be sufficient in identifying potential future litigation. Also, the risks involved are too significant to take lightly, so consider working with a lawyer specializing in tort law. Having a specialized lawyer ensures that all aspects of risk assessment are considered and matched with the best cause of action to minimize risks.

Mitigating Risks 

Once you identify potential risks, the next step is mitigating them, which can take several approaches. The first approach is negotiating an acquisition or share price that reflects the potential mass tort liability. So you buy a lower price to ensure you do not run into losses.

You can then use the balance to buy sufficient coverage for potential liability lawsuits. However, it’s important to note that insurance companies will charge high premiums for companies with a history of tort or even deny coverage if the risk is too high.

You can also agree on setting aside a contingency fund for potential mass tort refundable after a specific number of years. 

Final Words

Mergers and acquisitions are part of business growth. But they can also become a business’s worst nightmare when not handled properly. For example, when mass tort gets into the picture. However, with the right understanding, making the right choices and avoiding getting your business into a financial mess is possible.  

Categories: News


You Might Also Like
Read Full PostRead - Eye Icon
PSD2: How Will New Regulations Affect Retailers?
Legal
10/09/2019PSD2: How Will New Regulations Affect Retailers?

In September 2019 new rules will be implemented by the European Commission to improve online payment security and ease-of-use for consumers. But how will these affect retailers? Staff Writer Hannah Stevenson discusses.

Read Full PostRead - Eye Icon
Transformations in the Digital Age
Finance
10/06/2015Transformations in the Digital Age

Against the backdrop of the recession, there has been a relatively low level of M&A activity over the past five years; however things very much heated up in 2014.This rise looks set to continue in 2015, with economic conditions improving and business confidenc

Read Full PostRead - Eye Icon
5 Tips on How to Look After Your Company’s Financial Health
News
01/09/20235 Tips on How to Look After Your Company’s Financial Health

There were 13,125 business bankruptcies filed throughout the United States in 2022. To avoid this, you must make it a practice to look after your company’s financial health. As with our health, an organization’s financial well-being serves as an in

Read Full PostRead - Eye Icon
5 Reasons Every Company Must Use Recruitment and Onboarding Software
News
11/04/20235 Reasons Every Company Must Use Recruitment and Onboarding Software

Finding the right person for a job can be time-consuming and expensive. Onboarding them is even more challenging, especially when multiple teams are involved in the hiring process.

Read Full PostRead - Eye Icon
Unmatched Customer Experiences
Innovation
26/02/2019Unmatched Customer Experiences

2020 Companies is a sales and marketing agency who employs over 11,000 highly-skilled brand execution and consumer engagement experts who specialize in sales, training, merchandising, advocacy, and experiential marketing events. Recently, we caught up with Ste

Read Full PostRead - Eye Icon
How Your Business Can Benefit from UI Design
News
06/10/2021How Your Business Can Benefit from UI Design

Are you interested in hiring a UI designer to take your business to the next level? Here we are going to take a look at the different reasons why you should invest in a UI professional.

Read Full PostRead - Eye Icon
Soft Launch Strategy for Your App: Why and How to Do It?
News
08/06/2022Soft Launch Strategy for Your App: Why and How to Do It?

Especially for first-time app developers, a soft launch can be immensely valuable. It enables you to trial your app without going all-out straight away, thereby allowing you to test the waters first.

Read Full PostRead - Eye Icon
Can Automation Help to Eradicate Human Error in the Workplace?
Innovation
27/09/2022Can Automation Help to Eradicate Human Error in the Workplace?

Each day, businesses across the country handle countless transactions and obtain vast amounts of data. Unfortunately, while processing and utilizing this data, the opportunity for human error is high. These mistakes can be costly.

Read Full PostRead - Eye Icon
Swiss Excellence in Business Aviation
Innovation
10/11/2017Swiss Excellence in Business Aviation

Swiss Excellence in Business Aviation



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have a number of unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow