It is true that tasks and timing are determined by the circumstances of each transaction, but specific legal aspects apply to all transactions in the merger and acquisition process. 6 TYPES OF MERGERS LONG-TERM MERGER ACTION BY SHARE prepare, file and clarify with the SEC for at least 3-4 months (Form S-4 Registration Statement) Obtain regulatory and third-party approvals for the merger (e.g., Hart-Scott-Rodino Antitrust Depot) Obtain shareholder approval The merger is finalized upon filing of the deed of merger Dissenting shareholders may exercise statutory valuation or other rights recourse. CASH OFFER + ABBREVIATED FREEZEOUT MERGER The merger may take place on the day following the 20th business day of the offer period. Target`s Board of Directors Recommends Cash Offer to Target Shareholders Once the acquirer has reached a certain threshold (e.g. 90% of the target company`s shares), the acquirer may eliminate the remaining minority shareholders of the target company without a formal general meeting (“payout”) (abbreviated freezeout merger). Minority shareholders of the target company receive a cash amount or can exercise statutory valuation rights Only if the target company`s shares are acquired in cash and the target company is incorporated in a state that allows short-term mergers (e.g. Delaware) The due diligence process is arguably the most important part of a merger and acquisition, because it can prevent financial or legal problems in the future. Due diligence begins only after an agreement has been reached between the acquiring and acquired companies, and must be completed before official documents are signed. Mergers and acquisitions have many legal aspects, as they involve the process of merging two different companies through different financial transactions.3 min read The M&A practice at PPT Legal combines the in-depth knowledge of our lawyers in the fields of finance, corporations, competition, employment, regulation, insolvency and tax law. Our lawyers advise domestic and multinational companies on all legal aspects at every stage of a transaction, from legal due diligence, drafting and negotiation of share purchase agreements and other corporate documents of the merged company, to the implementation of mergers and post-integration issues. Initial planning helps identify the right target company by analyzing company information from public sources, but the initial planning phase is not very effective when it comes to more specific information about the company, such as financial situation, strategies, employee and management issues, legal issues, taxes, environment, and government affairs.
etc. Due diligence includes all this more specific information about the target company. PPT Legal has provided legal support and advice to its clients on large and complex transactions. Our lawyers have extensive expertise and work in teams that allow them to effectively manage all legal aspects of mergers and acquisitions. There are a lot of details about the M&A process, both in terms of laws and transaction processes, so anyone willing to go through it should give plenty of time to get it right. Introduction P.V. Viswanath Class Notes for FIN 648: Mergers and Acquisitions. Some unusual and eccentric factors are taken into account in the calculation of working capital, including one-time effects, addbacks and cyclical items.
8 TYPES OF MERGERS HORIZONTALLY same industry, e.g. competitors + competitorsVERTICALLY DIFFERENT STAGE OF PRODUCTION, E.G. BUYERS + SELLERS DIFFERENT INDUSTRY CONGLOMERATE, P. EX. qualified majority voting in favour of the merger; Target may be a party to a government or other contract or license of value that terminates under its terms when Target is acquired by another person Tax-free* Acquisition of C companies Types of detached bases: IRC §368(a)(1)(A) — IRC Legal Merger §368(a)(1)(B) — Acquisition of shares for IRC shares. 3 DEFINITIONS MERGER ACQUISITION COMBINATION (between equals) Friendly stock swap + money transfer Transfer of assets and liabilities ACQUISITION (broad vs. Weinberger v. UOP) Unocal Unocal Corp. v.
Mesa Petroleum Co.`s proportionality test (Del. 1985) is one of the most important cases in U.S. corporate takeover law and marks the beginning of an “era of legal critical thinking and limitations” of director discretion. Initial burden for directors to demonstrate that defensive measures are proportionate to the threat of hostile bids. Once directors have passed this initial review, their actions are again eligible for the presumptions of the commercial judgment rule. > directors must overcome the initial burden before invoking the commercial judgment rule. Revlon Auction Obligation: Revlon, Inc. v. MacAndrews (Del. 1986) Once the dissolution of a corporation is inevitable and the target company`s board of directors decides to sell the company, the board assumes the role of an auctioneer with a duty to maximize shareholder value. A working capital adjustment is considered part of the purchase price for the purposes of the M&A transaction process.