Canadian Company Acquired, Employees Not Informed
October 20, 2020 5:51 AM Subscribe
(YANML) The company that I work for has been acquired by another company (found the information here: https://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/h_lk00014.html in Acquisition Notifications). This happened over 6 months ago and the employees have not been informed.
Mostly, I wonder if this is legal, but in general is this something that happens? I know that companies try to keep everything hush-hush before a merger or acquisition, but I've never heard of a company not telling its employees after the company has been acquired.
Assuming it's legal, what is (your best guess to) the reasoning behind this? Is it a common practice?
Mostly, I wonder if this is legal, but in general is this something that happens? I know that companies try to keep everything hush-hush before a merger or acquisition, but I've never heard of a company not telling its employees after the company has been acquired.
Assuming it's legal, what is (your best guess to) the reasoning behind this? Is it a common practice?
It really depends on the structure of the companies involved.
Megacorp owns Midicorp. Employees of Midicorp think of themselves as working for Midicorp. They have their own HR. Paychecks say "Midicorp". They are dimly aware of the fact that their company is owned by another company (rather than, say, being publicly traded), but that doesn't affect them day-to-day.
Then Megacorp sells Midicorp to Gigacorp. Employees of Midicorp still get their paychecks from Midicorp. They still have their own HR department. Nothing materially changes.
In this situation I could imagine no notification, and most employees not even noticing that anything happened.
posted by Winnie the Proust at 7:49 AM on October 20, 2020 [1 favorite]
Megacorp owns Midicorp. Employees of Midicorp think of themselves as working for Midicorp. They have their own HR. Paychecks say "Midicorp". They are dimly aware of the fact that their company is owned by another company (rather than, say, being publicly traded), but that doesn't affect them day-to-day.
Then Megacorp sells Midicorp to Gigacorp. Employees of Midicorp still get their paychecks from Midicorp. They still have their own HR department. Nothing materially changes.
In this situation I could imagine no notification, and most employees not even noticing that anything happened.
posted by Winnie the Proust at 7:49 AM on October 20, 2020 [1 favorite]
Response by poster: It's a small company (~30 employees) and interaction with the owners is sporadic right now because of COVID, but normally all employees can talk to them. The beneficial owner definitely changed; the company was acquired by a much larger company in another country.
"It could be that the new owners are truly outside independent investors that want the current (or current at the time of acquisition) management to stay in place."
I think that is probably true, but without being formally informed it's hard to be sure.
Thanks for the answers so far.
posted by Laura in Canada at 7:55 AM on October 20, 2020 [1 favorite]
"It could be that the new owners are truly outside independent investors that want the current (or current at the time of acquisition) management to stay in place."
I think that is probably true, but without being formally informed it's hard to be sure.
Thanks for the answers so far.
posted by Laura in Canada at 7:55 AM on October 20, 2020 [1 favorite]
It seems a little odd to me that this happened, but really it just comes down to company culture and maybe people being busy or feeling like it's awkward. Whether it's a matter of Canadian law that you *must* be informed, I can't say. I'm not sure why it would be required by law, but the same is true for many laws that are on the books in many countries.
posted by Winnie the Proust at 2:50 PM on October 20, 2020
posted by Winnie the Proust at 2:50 PM on October 20, 2020
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There are many reasons why there would be an acquisition and no notification. One, the actual beneficial owner did not materially change. It could be just separating this company from other businesses within a larger business, but the same people or stockholders who own the original company own the new company. It could be a tax issue. The sale could be for estate planning issues. It could be that the new owners are truly outside independent investors that want the current (or current at the time of acquisition) management to stay in place. If it is a closely held company, maybe one of the owners was/is sick and wanted a liquidating event. Maybe the new owners were worried that if a sale was announced it would cause employees to leave or some sort of upheaval.
Not knowing anything about the company, its size, its ownership structure, there could be many reasons why they did not think it necessary to make a big deal about a change in ownership. How often do the employees interact with the actual owners?
posted by AugustWest at 6:41 AM on October 20, 2020