Mergers and Acquisitions Lawyer
Mergers and acquisitions are both types of business transactions that consolidate two or more companies into one. They are both a major event for a company and will affect everybody in both of the businesses, from the owners and shareholders right down to customers and employees. To ensure a merger or an acquisition goes smoothly, thorough legal preparation is required. Nakase Wade’s Merger & Acquisition attorneys can represent your interests throughout the mergers and acquisitions process to ensure you and your company are protected, whether you are the buyer or the seller. A mergers and acquisitions lawyer can help you make sound business and legal decisions from the start, such as:
- Confidentiality and non-circumvent agreements
- Business broker engagement agreements for sellers
- Antitrust provisions
- Corporate governance
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A merger is two or more companies join to form one company. There are five different types of mergers that are used: vertical, horizontal, conglomerate, market extension, and product extension. Which you use will depend on the needs of both businesses.
While in a merger, there is usually one buying party and one selling party, it is possible to have a merger of equals where two companies combine with equal shares. Each company will have equal representation on the board, and stockholders will receive shares of the new company.
It is rare to have a true merger of equals, often one company is acquiring another but will call it a merger of equals out of respect for management and as a marketing tactic.
An acquisition occurs when one company purchases another. This can be done through purchasing a substantial amount of a company’s assets, or stocks and other equity interests.
The acquirer purchases all the shares of a company, thus taking on all of their assets and liabilities. This can be a complex process if there are a large number of shareholders in the company.
The acquirer purchases most of or all of the assets of a company, including inventory, stock, facilities, vehicles, and equipment. They don’t need to purchase all of the company’s assets but can choose which assets they want to take. This is advantageous as a company can select which assets and liabilities they take.
Experienced mergers and acquisitions attorneys at Nakase Wade can help you select the right tactic for your merger or acquisition.
Considerations for Mergers and Acquisitions
Whether you are undertaking a merger or an acquisition, both are complex transactions and need strategic business and legal advice. An experienced mergers and acquisitions attorney can guide you through the process.
Some of the legal considerations of a merger or acquisition are:
Both companies must conduct due diligence throughout the merger or acquisition process. Sellers must make sound business decisions that maximize the company’s value right until the effective date of sale. They must also provide accurate documentation. The seller must analyze this documentation to spot any risks and red flags before they close. A mergers and acquisitions lawyer can assist you with assembling all the necessary documentation and reviewing it.
Corporate governance is a critical factor of due diligence. The seller must share important documents with the buyer. This includes corporate codes of conduct, bank accounts, bylaws, corporate reorganization, policy manuals, press releases, and incorporating documents, amongst other things. The seller must provide these promptly and practice full disclosure to ensure the sale goes smoothly.
Government agencies routinely review large mergers and acquisitions to prevent anti-competitive issues such as monopolization. Most contracts for large mergers and acquisitions include provisions for how the companies will cooperate during any antitrust reviews. A mergers and acquisitions lawyer can assist with negotiating fair provisions that protect the interests of both parties. Buyers like the option of exiting the deal if it is not within their interests and sellers want the deal to close quickly.
Mergers and acquisitions have significant tax implications for both parties. A mergers and acquisitions attorney can oversee a tax lawyer to ensure both companies can take advantages of tax structures.
How Does a Mergers and Acquisitions Lawyer Help in My Business Transaction?
A mergers and acquisitions lawyer will help the process go smoothly and stay compliant with local, state, and federal laws. They can assist with deciding on the correct deal structure, negotiating and drafting the transaction terms, obtain third-party consent, close the transaction, and perform any post-closing tasks.