MergerTalk: Labor contracts can add work to dealmaking

Newswire

By Jessica Hall NEW YORK, Oct 27 (Reuters) - Acquiring a unionized company means inheriting labor contracts, as well as health care and pension obligations, that can limit the new owner's initial efforts to cut costs and restructure. It's a risk some buyers refuse to take. Some auctions, such as grocer Safeway Inc.'s unsuccessful attempt to sell its Dominick's chain in 2003, have fallen apart as cautious suitors refused to absorb labor costs or failed to renegotiate new deals with ...

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