M&A – Buying and Selling Companies

M&A

When it comes to the acquisition or sale of companies and businesses, M&A is quickly mentioned. The abbreviation "M&A" stands for Mergers & Acquisitions. This usually refers to the acquisition and disposal of companies and equity interests (shareholdings). However, it often also involves other transactions with corporate law implications, such as capital increases, conversions, the conclusion of so-called corporate agreements (for example, control agreements and profit transfer agreements) or initial admission to stock exchange trading (Initial Public Offering – "IPO").

What happens in this process?

Acquisitions and disposals of companies typically follow a similar sequence:

• Preparation or review of an information memorandum or other "teaser" to generate interest from potential buyers
• After initial discussions with interested parties, a Letter of Intent (LoI) or Memorandum of Understanding (MoU) is often signed to align, develop and document agreed understanding regarding essential transaction parameters
• If negotiations continue, the process usually becomes more complex, as this is often followed by an analysis of the economic, technical and legal conditions of the target company (due diligence review).
• If the due diligence review is satisfactory, the next step involves contract negotiations culminating in conclusion ("Signing")
• It may be necessary to obtain approvals required for the performance of the contract, for example due to antitrust law restrictions (merger control) or foreign trade law restrictions.
• The transaction is completed with the performance of the contract ("Closing") including appropriate documentation and verification.
• Depending on what has been negotiated, the performance of transition agreements (for example "transition services") and design of adjustment and/or integration measures (for example "post-merger integration") may still be required.

How can we help you?

It is of course not mandatory to seek legal advice from a lawyer when acquiring or selling a company. The takeover of a business or succession as an owner can, however, be legally complicated. If you obtain expert legal advice on your M&A project from the outset, you can not only avoid expensive mistakes but also often achieve a significantly better result.

AVANTCORE Rechtsanwälte, our Stuttgart-based law firm, is pleased to advise and represent you in the negotiation, design and implementation of such and other M&A transactions – if you wish, also only in selected areas, for example in conducting a pure IP due diligence. Professional cooperation with other advisers – for example tax consultants or IT service providers – is a matter of course for AVANTCORE and repeatedly put into practice.