Company Mergers Research Articles

Face‐to‐face interactions and the returns to acquisitions: Evidence from smartphone geolocational data

AbstractResearch SummaryWe examine the effect of face‐to‐face interactions between acquirers and targets before the acquisition announcements on acquisition returns. We argue that frequent interactions increase the target management's trust in the acquirer and benefit the acquirer by mitigating competition in the bidding process. For a sample of U.S. domestic acquisitions, we use smartphone geolocational data to measure the movement of people between merging companies in the months before the announcement. We find that with more frequent interactions, acquirers earn higher stock market returns at the announcement and targets receive fewer later bids from other bidders. Moreover, more frequent interactions are associated with lower returns to public targets vis‐à‐vis their acquirers. The effect of interactions is weaker when shareholder‐manager agency problems in the target are less severe.Managerial SummaryPrevious research shows that while acquisitions can create synergistic gains, the presence of potentially competing bidders forces acquirers to pay a high price for their targets, which makes acquisitions generally unprofitable for acquirers. We provide evidence suggesting that frequent social interactions between the acquirer's and the target's management in the pre‐acquisition phase increase the target management's trust in the acquirer, making it more willing to cede control to the acquirer and less eager to seek alternative bidders. By mitigating competition in the bidding process, social interactions make acquisitions more profitable for acquirers vis‐à‐vis targets. Social interactions are less effective when the target's management owns a larger share of the target or is better monitored by shareholders (e.g., in companies with concentrated ownership or private companies).

Legal Consequences of the Merger of Companies on the Implementation of Guarantee Function of Mortgage

This study aims to: 1) Knowing and analyzing the execution of mortgage guarantees due to the company merger, 2) Knowing and analyzing the legal consequences of the merger on mortgage holders to be executed, 3) Knowing the deed of settlement resulting from the company merger on the implementation of the mortgage guarantee function. The research method used empirical juridical, namely by collecting data or statutory regulations, as well as conducting interviews with related respondents. The specifications used in this study were descriptive analysis. Researchers used empirical specifications with primary and secondary data. The primary data used were obtained directly through the opinions and statements of the respondents through interviews and the reality in the field through observation. The secondary data used by the researcher is carried out by conducting a literature study by reviewing, analyzing and then processing it into a descriptive narrative so that it is easy to understand when read. The data analysis method used by researchers from the stages of primary and secondary data obtained would be descriptive-qualitative analysis. Based on the research, it can be concluded that the legal consequences of the company merger on the implementation of the mortgage guarantee function of the old company that had merged did not renew the credit agreement and mortgage certificate after the merger, so that the new company could not carry out the execution due to the negligence of the old company. Even though the guarantee is in the old company's control, the bank is only the seller of the goods, it remains the property of the debtor so that it is against propriety and violates the rights of the owner of the goods if the bank violates it by selling cheap prices. In accordance with developments in Indonesia after the birth of the Mortgage Law, the grosse deed is still maintained by introducing the mortgage certificate which also uses irah-irah so that it has executive power.

Analysis of Financial Performance Differences Before and After the Merger of Companies Listed on the Indonesian Stock Exchange

This study aims to analyze the differences in the company's financial performance before and after the merger in companies that carry out merger activities. Company performance is measured using financial ratios: Current Ratio (CR), Debt to Asset Ratio (DAR) Debt to Equity Ratio (DER), Net Profit Margin (NPM). Return On Assets (ROA), Return On Equity (ROE). This research was conducted using a quantitative method, by taking data from all public companies that merged on the Indonesia Stock Exchange (IDX) with a time span between 2014-2020, the sampling in this study used the purposive sampling method, with data obtained as many as 30 companies. who did the merger. The descriptive statistical test used is the Independent Sample T-test and the Paired Sample T-test to answer the hypothesis. The results of this study indicate that in partial testing that the current ratio shows a significant difference in the overall comparison before and after the merger. while the five financial ratios, namely DAR, DER, NPM, ROA, and ROE showed no difference three years before and three years after the merger

Long-term Performance of Going Public through SPACs

Despite a surge in the merger of companies listed on the KOSDAQ market with special purpose acquisition companies (SPACs), limited domestic studies have systematically compared the listing through SPAC mergers and the general IPO. This study analyzes the impact of such companies going public after merging with SPACs as well as their performance by comparing them with the conventional IPOs. First, the firms listed through SPAC mergers are smaller and have a higher proportion of non-manufacturing industries than the conventional IPOs. Second, the operational and stock price performance of the firms listed through SPACs are not inferior to that of the conventional IPOs. Finally, a higher share allocation to institutional investors and subscription rates, for the shares recorded at the time of the SPAC listing, are related to the stock price performance observed after SPAC mergers. According to the empirical results of this study, going public by merging with SPACs provides early listing opportunities to small- and medium-sized companies; they do not experience a deterioration in their financial performance after being listed. The listing of SPACs creates a different and valuable path to enter the KOSDAQ market for such companies as compared to the conventional IPOs.

KOMBINASI BISNIS BANK SYARIAH: REFLEKSI SATU TAHUN BANK SYARIAH INDONESIA

This research aims to explore the achievement of PT Bank Syariah Indonesia (BSI) in the first year implemented business combination. Data are penetrated from several information and quarterly financial statements that published through website of BSI. The results of this research show that business combination that executed by BSI is a merger where a company that become a survivor is PT BRI Syariah, Tbk., while Bank Syariah Mandiri and BNI Syariah become merging companies. So, BSI is a subsidiary company of PT Bank Rakyat Indonesia, Tbk. The products and services that offered by BSI to its customers are multi-enough and also accommodate the needs of customers both have sophisticate and naive of technology. Beside of that, the financial performance of BSI also works out positively trend during three quarters respectively. The limitations of this research are only to capture operationally one year of BSI and just take three aspects namely portion of ownership, products & services and financial performance, so relatively lack to show the comprehensive condition. The suggestion for next research is to develop or take other aspects that not studied in this research.

Data Mining in Product Cycle Prediction of Company Mergers

The dynamic nature of business marketing in various parts of the world and industries is associated with a quest to achieve or attain and retain competitive advantages. With such advantages coming in the form of increased product user bases, a majority of the firms have ended up embracing business internationalization to stretch beyond local and regional borders within which they are based. With these efforts associated with improved company performances, Wal-Mart has been unexceptional. The effort to retain a competitive advantage and superior brand image across the world has been evidenced by its recent merger with Massmart, a South African company that owns brands such as Builder’s Warehouse, Makro, and Game. It is also worth highlighting that Massmart is South Africa’s second largest distributor of consumer goods and remains the largest retailer dealing in basic foods, liquor and home improvement equipment, and general merchandise. This paper examines the merger between Wal-Mart and Massmart, focusing on issues such as the international market analysis of the retail industry, aspects of product category and demand size, and competition analysis. In so doing, resultant recommendations might give an insight into current trends in business marketing strategies that embrace mergers, as well as lay an opportunity for improvement in the Walmart-Massmart merger and others at the intra-industry and inter-industry level.

Change of the business companies merger status in the light of compliance of Law regulations in the Republic of Srpska with regulations of the European Union

In the paper, the author analyzes the change of the business companies in the Republic of Srpska merger status, that is, the possibilities and ways through which one or more companies can change their structure in order to adapt to market conditions as easily as possible. First of all, the aim of the paper is to display the state of legislative regulations on status changes in the Republic of Srpska and the degree of compliance of this area of commercial law with EU regulations. The author started from the fact that the Law on business companies of the Republic of Srpska from 2008 and subsequent amendments to that Law harmonized this area with community law. In terms of methodology, the paper used the method of analysis, and the comparative method, which achieved a concise observation of the distinctions between the described and analyzed legal regulations. On the basis of the performed analysis, it is concluded that with the adoption of the Law on business companies of the Republic of Srpska, the matter of the status change of the merger has been significantly harmonized with the regulations of the European Union by introducing novelties regarding the modification of the founder's rights of the company that is being terminated, the introduction of auditors and reporting by an independent expert during the merger of companies.

РИНОК ЗЛИТТІВ І ПОГЛИНАНЬ В УКРАЇНІ: ТЕНДЕНЦІЇ ТА ПРОБЛЕМИ

The purpose of the article is to study the current state, features and problems of the development of the market of mergers and acquisitions in Ukraine. The urgency of considering this topic is due to the importance for Ukrainian companies of participating in the processes of mergers and acquisitions, which gives the opportunity to expand the scope of activities, increase profitability, penetrate new markets, and reach a qualitatively new level of development. The essence of mergers and acquisitions as a form of integration processes has been specified. Motives for initiating the process of merger or acquisition are analyzed. The classification of types of mergers of companies is considered. An analysis of the state of development of the Ukrainian M&A market for the period 2017–2021 was carried out, positive dynamics of the number and value of deals were revealed. The distribution of M&A deals by industry was analyzed. The most attractive sectors of the Ukrainian economy from the point of view of conducting mergers and acquisitions were identified: IT and telecommunications, agriculture, food industry, mining industry. Attention was drawn to the significant growth of M&A deals in software, electronic and data-intensive industries due to the impact of the COVID-19 pandemic on increased Internet activity. It was concluded that the most active participants in the Ukrainian M&A market are European investors, investors from the Middle East and North America. Obstacles to the formation of investment attractiveness of the Ukrainian market are named, in particular: high tax pressure; lack of stimulating function of taxes; high currency risks and currency restrictions; ineffective system of protection of private property rights. Among the problems of the development of the domestic M&A market, the following are identified as the main ones: underdevelopment of the stock market; a significant share of unfriendly takeovers, shady deals and raiding of business assets; a high share of insiders among shareholders; low development of business culture and ethics; insufficient use of mechanisms for financing deals, such as IPO and LBO financing; lack of transparency and availability of information about concluded agreements. The main directions of activation of M&A processes on the Ukrainian market are outlined.

The Analysis of Estee Lauder Group's Dominant Position Factors

This paper analyzes the factors that contribute to Estee Lauder's dominant position in the daily chemical industry. In this paper, we investigate the company’s strategies, accountings, risk estimates and future prospects. In the strategy analysis, the 4P analysis method is adopted to analyze its advantages from the aspects of the price, place, promotion and product and the company’s strategies under the COVID-19 pandemic. In accounting part, we have analyzed merging and acquisition, liquidity and efficiency of this company. We compare the debt-equity ratio, current ratio, quick ratio and turnover ratio to another company, Unilever, to analyze the advantages in accountings for Estee Lauder group. In the discussion part, this paper analyzes the risks faced by Estee Lauder group based on the real case, and makes an analysis of the future development prospects. This paper finds that Estee Lauder can remain invincible in the competition mainly due to its accurate market segmentation and effective financing strategies such as merger and acquisition of other companies. Through the analysis of Estee Lauder's competitive advantage, this paper provides some ideas for other small enterprises in decision-making and marketing.

Assessing the Merger of Online Platform Companies: Does it Lead to Monopoly or just Business Expansion? (Analysis of The Merged Company of GoTo)

Two large digital platform companies, Gojek and Tokopedia, officially merged to form a holding company called the GoTo Group that is considered to have anti-competitive behavior and potentially data monopoly. This article aimed to analyze the adequate response to potential violations of the Prohibition of Monopolistic Practices and Unfair Business Competition Regulation and legal issues related to consumer data monopoly issues. This article uses normative legal research with the conceptual research and statute approach. The result shows that it is necessary to define “relevant markets” and the “substituted products” to determine the existence of unfair business competition in the Gojek-Tokopedia merger. It requires analyzing the consumer behavior in other marketplaces other than Tokopedia; when consumers do not "run" to Gojek, it means they are not in the same market. To prevent privacy protection failures in post-merger data integration, companies need to assess data sharing that may be carried out as part of a risk assessment. Regarding the rights of data subjects, The company needs to provide notification to the data subject regarding the Merger and Acquisition (M & A) given the data subject's right to refuse and guarantee that the M & A process will not violate the right to privacy of the customer's dataKeywords: Competition Law; Digital Platform; Merger Menilai Penggabungan Perusahaan Platform Online: Apakah Mengakibatkan Monopoli atau Hanya Ekspansi Bisnis? (Analisis Penggabungan GoTo)AbstrakDua perusahaan platform digital besar, Gojek dan Tokopedia, resmi bergabung membentuk holding company bernama GoTo Group yang dinilai memiliki perilaku anti persaingan dan berpotensi monopoli data. Artikel ini bertujuan untuk menganalisis respon yang memadai terhadap potensi pelanggaran Peraturan Larangan Praktik Monopoli dan Persaingan Usaha Tidak Sehat serta masalah hukum terkait masalah monopoli data konsumen. Artikel ini menggunakan penelitian hukum normatif dengan pendekatan penelitian konseptual dan undang-undang. Hasil penelitian menunjukkan perlunya mendefinisikan “pasar relevan” dan “produk substitusi” untuk mengetahui adanya persaingan usaha tidak sehat dalam merger Gojek-Tokopedia. Hal ini membutuhkan analisis perilaku konsumen di pasar lain selain Tokopedia; ketika konsumen tidak “lari” ke Gojek, berarti mereka tidak berada di pasar yang sama. Untuk mencegah kegagalan perlindungan privasi dalam integrasi data pasca-merger, perusahaan perlu menilai pembagian data yang mungkin dilakukan sebagai bagian dari penilaian risiko. Mengenai hak subjek data, Perusahaan perlu memberikan pemberitahuan kepada subjek data mengenai Merger dan Akuisisi (M&A) mengingat hak subjek data untuk menolak dan menjamin bahwa proses M&A tidak akan melanggar hak privasi data pelangganKata Kunci: Hukum Persaingan Usaha; Platform Digital; PenggabunganОценка слияний компаний онлайн-платформ: приведет ли это к монополии или просто к расширению бизнеса? (Анализ слияний GoTo (Gojek и Tokopedia) АннотацияДве крупные компании, занимающиеся цифровыми платформами, Gojek и Tokopedia, официально объединили свои усилия, чтобы сформировать холдинговую компанию GoTo Group, которая, как считается, ведет антиконкурентную политику и может монополизировать данные. Данная статья направлена на анализ адекватного реагирования на возможные нарушения Положения о запрещении монополистической практики и недобросовестной конкуренции, а также на правовые вопросы, связанные с проблемой монополии на данные потребителей. В данной статье используется нормативно-правовое исследование с концептуальным и правовым исследовательским подходом. Результаты исследования указывают на необходимость определить «соответствующие рынки» и «продукты-заменители», чтобы определить наличие недобросовестной деловой конкуренции в слиянии Gojek-Tokopedia. Это требует анализа поведения потребителей на рынках, отличных от Tokopedia; когда потребители не «бегут» в Gojek, это означает, что они не находятся на одинаковом рынке. Чтобы предотвратить сбои в защите конфиденциальности при интеграции данных после слияния, компаниям необходимо оценить возможное совместное использование данных в рамках оценки рисков. Что касается прав субъекта данных, Компания должна уведомить субъект данных о слиянии и поглощении (M&A), учитывая право субъекта данных отказаться и гарантировать, что процесс M&A не нарушит права на конфиденциальность данных клиента.Ключевые слова: Закон о деловой конкуренции; цифровые платформы; слияние

Perlindungan Hukum Terhadap Pekerja dalam Terjadi Pemutusan Hubungan Kerja (PHK) Akibat Corporate Action di Tinjau dari Undang-undang No. 11 Tahun 2020 Tentang Cipta Kerja (Cluster Ketenagakerjaan)

This research is motivated by the birth of Article 154A Paragraph (1) Letter a of Law no. 11 of 2020 concerning Job Creation (employment clusters). In this provision, it is explained that Termination of Employment can occur because the company merges, consolidates, takes over or separates the companies and the worker/laborer is not willing to continue the working relationship or the entrepreneur is no longer willing to accept the worker/labourer. However, layoffs due to the occurrence of this Corporate Action in practice are not always as expected, where workers/labourers who are not willing to continue working relationships due to merger, consolidation, takeover or separation of companies are considered to have resigned voluntarily which could have an impact on normative rights. workers/laborers when laid off. This study raises 2 (two) problems related to layoffs due to Corporate Action, namely first, how is the Corporate Action mechanism in the case of companies merging, consolidating, taking over, or separating companies. Second, what are the normative rights of workers/labourers that should be accepted in the event of layoffs due to Corporate Action. This study aims to find an appropriate Corporate Action mechanism when the company merges, consolidates, takes over, or separates companies, so that it can provide fair legal protection for both workers/labourers and employers. This study uses a qualitative research method with a normative juridical approach, where the data collected to answer the problem formulation is taken based on a literature study that is guided by laws and regulations, books, literatures, articles or journals. journals and other materials related to the issues discussed. After the data has been collected, the writer then analyzes it using the prescriptive analysis method, which is an analysis method based on the data collected to obtain clues which in the end draws a conclusion. The results of this study indicate that Article 154 A of Law no. 11 of 2020 concerning Job Creation states that employers can lay off workers if there is a Corporate Action. The use of the word "can" has the meaning that the provision is non-coercive. So doing or not terminating the employment relationship in the event of a Corporate Action is the entrepreneur's constitutional right which is regulated by law. Although layoffs due to this corporate action are the prerogative of employers, in its implementation, layoffs cannot be carried out but must comply with the procedures for termination of employment. Where in the event of a layoff, the entrepreneur is obliged to pay severance pay and/or gratuity for the period of service and/or compensation for entitlements that should be received by the worker.

IS TWO ALWAYS BETTER THAN ONE? Customer Perception on the Merger of Startup Decacorn Companies

Recently, the two decacorn Startups in Indonesia decided to collaborate with a merger scheme and accumulate over 100 million monthly active users. The Merger triggers a new perception for customers and has an impact on the level of Brand Loyalty. However, no research examines how customer perception to mergers between the startup with decacorn status. Therefore, this study intends to fill this gap. Using the mix method approach, this study investigates how customer perception of startups’ mergers decacorn status and examines its effect on customer behavior. The findings revealed that customer self-congruency successfully mediates the research gap between customer perceptions on merger scheme (sig. 0.000 < 0.05, β = 0.575) and purchase intention (sig. 0.000 < 0.005, β = 0.390) by combining impulse buying strategies (sig. 0.003 < 0.05, β = 0.329). The paper contributes theoretically to the body of knowledge in the customer’s perception of the merging company. The study also gives new insight that customers’ perception of the Merger of two decacorn companies cannot guarantee that customers will be loyal to the company without connecting the customer self-congruency in each partner. It is recommended that the manager gain stimulus in building conformity of company image with customer perceptions that create self-congruency.

Correlation of Communication and Compensation and Benefits on Employees Performance Mediated by Motivation Research on Companies Merger and Acquisition in Indonesia in Oil and Natural Gas Industry

Merger and Acquisition (M&A) is a common business practice in the twenty-first century. In M&A, human resource is the key to its success especially to create value-added for the company. Thereby, employees' performance shall be understood by the company towards its objectives. The purpose of this research is to examine what factors have potential effects on employees' performance in the context of companies after acquisition. Factors analyzed are communication and compensation & benefits, using motivation as a mediation factor on the relation between the factors to the employee's performance. Quantitative method is used in this research, whereas the data is collected by online questionnaire to 215 respondents of employees in four oil and gas companies in Indonesia after their acquisition by the state-owned enterprise within the period 2015-2018. Data analysis is processed with the help of SPSS of path analysis and Sobel test to test the hypotheses. Findings show that communication and compensation & benefits have a significant correlation on employees' performance. In addition, Motivation as a mediation variable also intervenes the correlation of communication and compensation & benefits to employees' performance.

Information asymmetry, regulatory inquiry, and company mergers and acquisitions: evidence from Shenzhen Stock Exchange comment letters

AbstractThis study investigates the governance effect of comment letters. Companies with severer information asymmetry are more likely to receive merger and acquisition (M&A) comment letters, which demonstrate a lower M&A success rate; however, such companies exhibit better long‐term M&A performance. Further analysis shows that the long‐term governance effects are stronger in cross‐industry and cross‐region samples and that the transmission channels are information disclosure and internal control quality of the inquired firms. This study enriches the literature on government regulation effectiveness, develops new evidence on the localisation of government regulation from developed economies, and provides policy implications for further regulation reform in transition economies.

Analyzing the Company Merger Between Tokopedia and Gojek from the Perspective of Business Competition Law: Does it Lead to Anti-Competitive Behavior?

This study analyses how the merger between Tokopedia Ltd and AKAB Ltd is viewed from business competition law. The problem in this article is whether monopolistic actions and unfair business competition indicate the merger between these two largest digital companies? As normative legal research, the study uses an analysis of the statute approach and uses research sources for primary legal materials, secondary legal materials, and tertiary legal materials. The study results concluded that although they are a large company in the same market group, both are not indicated by monopolistic actions and unfair business competition. This is because the post-merger company does not control production/distribution/consumption in the community, and consumer behaviour is not centred on the post-merger company. When faced with the current development of the digital era, the relevant market theory is no longer relevant. Therefore, this study suggests that in addition to looking at the appropriate market conditions, merger assessments can also use consumer behaviour theory to determine whether a merger engages in monopolistic action and unfair business competition or not.

Theoretical and methodological principles for accounting reflecton of goodwill: dialectics of development and directions of improvement

The rapid development of market relations, Ukraine's integration into the world economic space, encourage companies, in order to achieve competitive advantages, to explore new ways of capitalization. At the same time, the operations of purchase, sale, merger or acquisition of companies, the value of which directly depends on intellectual capital, are becoming more common. The difference in the assessment of market and book value of intellectual capital leads to a special economic and accounting category - goodwill.Despite the prospects of using such a component of assets as goodwill, today there are still a number of theoretical and practical problems, for example: problem of unambiguous understanding and interpretation of the essence of goodwill, methods of its valuation, and the practice of reflecting it in accounting and reporting by domestic enterprises. The study addresses issues related to establishing the nature of goodwill, its content as an intangible economic resource of the enterprise and the component of the value of capital and the problem object of accounting.The purpose of the work is to reveal the economic essence of goodwill as an object of accounting, to conduct a critical analysis of the current standardization of goodwill accounting, to generalize and systematize of existing problems in the formation of accounting information about this object. The task of this study is to formulate separate proposals for improving methodological approaches to accounting for goodwill, which are obtained on the basis of examined legislative and research sources of information. The scientific novelty lies in the substantiation of the accounting category of goodwill as a subjective value and an objectively existing resource, which should be actually reflected in accounting and reporting.

Regulations regarding the protection of employees rights in merger, division and conversion of trade companies

Regulations regarding the protection of employees rights in merger, division and conversion of trade companies

Does Material Adverse Change (MAC) Fulfill the Principles of an Agreement?

Material Adverse Change (MAC) clause is rarely discussed in contract law because it is an agreement between the two parties. This clause has quite extensive effects, especially at the time of the Covid-19 Pandemic. This article is generally found in company mergers and acquisitions agreements and credit or financing agreements. MAC Clause will be needed when there is a significant changes in business. This research wants to test whether the Material Adverse Change clause meets the principles’ requirements in a contract or agreement. The research is normative juridical research. This research will refer to the principles in agreement and relating to the definition of Material Adverse Change/Effect (MAC/E). This research concludes that Material Adverse Change is a clause which fulfills the principles in an agreement, especially the principle of the Freedom of Contract, the Principle of Good Balance, the Principle of Consensuality (Agreement/Consensualism), the Principle of Legal Certainty (Facta Sunt Servanda), the Principle of Good Faith, and the Principle of Personality. The MAC should be effective under the Pandemic’s condition.

Value Creation through Company Merger in the Financial Sector: Empirical Evidence from Slovenia

The paper explores value creation through company merger in the financial sector. The merger took place at a time when, due to the past financial crisis, the demands of regulators and central banks were aimed at abolishing leasing companies and integrating them with banks. The aim of the paper is to identify the basic areas necessary to assess the feasibility of the merger and to ensure the safe and profitable operation of leasing companies. The present study provides evidence on the integration of business resources and human resources. Moreover, the impacts scenarios on provisioning and profit of a company with credit ratings and the IFRS 9 standard are introduced. Simulations of the possible scenarios calculations are based on different parameters such as probability of default, loss given default, credit rating. Based on empirical research we find that the establishment of credit ratings is essential for the provisioning process. The latter are also a key factor in making impairments, which directly affect the balance sheet results. The projection of the merged company’s business operations brings acceptable returns and corresponding growth, which guarantees a long-term existence and a competitive position of the merged company. 

Sales, Acquisitions, and Mergers of Direct-to-Consumer Genetic Testing Companies

Direct-to-consumer genetic tests have become increasingly popular in the United States within the last few years. However, these tests pose many risks to the consumer, most notably privacy risks. A subset of these privacy risks involves the issue of company mergers, acquisitions, and sales. Many companies in the direct-to-consumer genetic testing market have privacy policies that contain a variation of a “business transfer” clause. These clauses specify that in the event the company goes through a business transition such as a sale, merger, or acquisition, the consumer’s personal information—including the consumer’s DNA—will be among the assets transferred. This Article explores the risks associated with these business transfer clauses as they relate to the consumer, and presents a solution to mitigate said risks. The solution lies in FTC v. Toysmart, wherein a toy company that filed for bankruptcy was restricted in selling its assets—which included its customers’ personal data— only to entities with the same interests as the toy company. This Article urges that the default interpretation standard of business transfer clauses track similarly such that a direct-to-consumer genetic testing company may only be sold to, merged with, or acquired by a company with the same or like interests.