What does it mean if your company gets bought by another company?

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Ed's picture
Ed
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Jan 20 2011 21:14
What does it mean if your company gets bought by another company?

So, for some background: the company I work for has just been bought by another company. It was loaded with debt to the point where some people were put into casa integrazione which basically means you're on paid leave but you're paid by the government. It also means that the company can't hire more staff until they've offered all those in casa integrazione their jobs back. The reason I was hired is because I'm not actually employed directly by the company, I'm an 'independent colloborator' they've reeled in to work on a 'project' (the 'project' I'm working on is teaching English to Italians for an indefinite period on a series of short term contracts i.e. I'm the hyper-precariat!)..

Anyway, I was basically wondering if people had any idea of what it actually means if your company is massively in debt and then bought by another company. What are the risks to workers? Are there any at all? I've asked my manager about the details and even mentioned redundancies and they're pretty adamant that the new owners are a good thing and won't lead to any.. But then I'd be a fool to take it at my boss' word wouldn't I? wink

Any help with this question would be much appreciated..

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nastyned
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Joined: 30-09-03
Jan 20 2011 21:57

Dunno in Italy but when the company I worked for went bankrupt and got taken over Transfer of Undertaking Protection of Employment regulations meant I was able to keep my existing pay and contract. Not that the new bosses mentioned these regulation to anyone...some of my fellow workers signed new contracts immediately thinking they had to if they wanted to keep their jobs.

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jef costello's picture
jef costello
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Jan 20 2011 22:08

As far as I know if your company is bought then they have to honour existing contracts. It might be in debt but if soeone has bought it without letting it go into bankruptcy first then either they think it is a going concern or there is some kind of tax dodge or asset stripping planned.

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Joseph Kay's picture
Joseph Kay
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Jan 20 2011 22:34

i'd do some digging into the purchasing company and their strategy (look at the investor section on the website etc). some have a reputation for aggressive aquisitions followed by centralising admin jobs etc via redundancies, others tend to buy firms 'as-is' and may have just snapped it up for cheap due to its debt problems. others still are just asset strippers.

if it's not a big enough (publically listed etc) company to have that kinda info available, google for news reports/press releases on them and you might be able to glean some of the above. i don't think there's a general rule about what happens following an acquisition as it's very much related to corporate strategy, although managers rarely miss an opportunity to look to cut costs so watch your back like.

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devoration1's picture
devoration1
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Jan 21 2011 05:30

The only experience I've had was one full of differences with your situation it sounds like. The company I was working for was very profitable, popular with the public and a small part of the 'cultural landscape' of the US; it was owned by a firm that owned about a dozen other businesses in all manner of industries (a soapmaking company, a retail chain, etc all existed as part of this incorporated firm)- anyway the firm goes bankrupt (because several of the other businesses are failing)- even though the company I worked for was financially doing very well. The company I worked for went up for a kind of 'secret auction', with one even larger company doing well in the same industry as one bidder and a liquidation firm as the other. The liquidationists won. The employees nationwide started rumors that we might be able, through individual contributions, scrounge together enough money to buy it from the liquidation firm and keep running the company as a worker co-op or collective but this was just a pipe dream. One day we're told new owners won't affect the situation on the ground at our location, the next (literally) we are told the company is being liquidated and we have maybe 6 months left to work there.

Anything can (and does) happen regarding mergers, buy-outs, etc.