Mergers and acquisitions can be a great way to develop your business, but we understand that the extensive due diligence required can be a daunting prospect.
Carrying out a proper assessment of the liabilities and risks involved in any merger or acquisition is absolutely essential, and professional legal assistance can be invaluable in ensuring your transaction goes smoothly.
First4lawyers has a team of corporate and commercial solicitors with a history of overseeing successful mergers and acquisitions. Contact us to find out how we can help you get started.
What are mergers and acquisitions?
Corporate mergers and acquisitions involve the coming together of two or more companies to pool resources and create opportunities for business development.
Whether your company is being bought out by another firm, acquiring someone else’s business, or if you are joining two companies together to make one larger one, you will face a number of challenges along the way.
Mergers and acquisitions are complex agreements, and each deal is unique. However, the process generally involves the following five stages:
- Assessing the strengths and potential benefits of the deal or deals available to you.
- Carrying out legal due diligence investigations.
- Negotiation of terms with other parties.
- Completion of the deal.
- Integration of the companies.
What are the advantages of mergers and acquisitions?
A carefully managed merger or acquisition can transform your business and bring significant benefits to all parties involved. When two or more businesses with a similar product range or service offering join forces, the pooling of staff, skills, resources and facilities can push the boundaries of potential profitability and security long into the future.
To ensure that your company receives the full benefit of any merger or acquisition deal, it is important for senior executives to consider the broad range of financial and operational issues these agreements inevitably bring up. This is where a solicitor can be of great use.
What are the issues and risks of mergers and acquisitions?
The failure to carry out due diligence prior to any merger or acquisition can lead to serious problems following the completion of a deal.
During the assessment stage, you should seek to establish a deep knowledge of the company you are joining forces with, taking into account the following factors:
- The strength of the company’s workforce.
- The details of all employment contracts of the company’s workforce.
- Shareholder agreements.
- Secrecy and confidentiality.
- Potential liabilities and indemnities.
- Cross border deal implications and international jurisdiction rules.
The failure to properly explore these areas can lead to various issues arising after the completion of the deal, particularly when it comes to employee matters. For example, if you fail to carry out a thorough assessment of employee contracts, you might receive a nasty shock when you discover that the company you merged with did not include a clause to prevent employees from leaving to join competitors.
Once due diligence is complete, there are further risks involved during the negotiation stage. It is important that you consider the full range of legal implications of the offer conditions, the bid documents, and the employee consultation.
Enlisting the services of an experienced corporate law specialist solicitor, like those First4lawyers gives access to, will help you to ensure that all aspects of the deal are right for your business before proceeding.
I am interested in a business merger or acquisition – what should I do?
The merger and acquisition process requires a careful assessment of your finances and legal standing before any work can begin, and specialist corporate solicitors from First4lawyers can help you to prepare for this.
We can assist companies of all sizes and sectors with merger and acquisition deals – contact us to discuss the prospects for your business and to find out everything we can do for you.