An example of a statutory merger is the acquisition of a weak company B by a strong company A.If both companies go through a restructuring before the merger:

– In case of company A, it would be difficult to find a justifiable reason, since
restructuring would take place only on the assumption that a merger will take place in
the future. Therefore, compromise with the workers would be difficult and layoff of
personnel unacceptable;
– As a result, company B would have to dismiss workers due to deteriorating business
conditions and pursue an M&A after the layoff of workers.

If restructuring is implemented after the merger:

– After the merger, all workers are legally employees of company A and not company B,
so it is impossible to discriminate between the workers.
– Therefore, the criteria to layoff workers must also include workers of company A and in
this case, the workers of company A will anticipate the situation and be against the
merger in the first place.

In reality, it takes several months from the negotiations until the merger is completed and during that time, the plans for dealing with the worker problem will be subject to discussion.

– The plans about restructuring and layoff will be led by company A and discussed
between the management and labor union of company B and the labor union of
company A.
– Before the merger, both companies A and B will commence preparations concerning
restructuring. However, after the merger, company A will complete the process on a
legal basis.