Mergers & Acquisitions/ Corporate Purchase Law
All the departments of our law firm can support an M&A-transaction with their professional knowledge and experience.
The approximate sequence of company mergers and business acquisitions can be divided into:
- Screening of the target (search of the target business);
- Establishment of contact ;
- Conclusion of non-disclosure agreement/memorandum of understanding;
- Due Diligence at Target;
- Deal Design;
- Signing of the M&A contract;
- Notification of the deal to the competitors authorities;
- Closing (Beginning of the implementation phase).
Corporate Purchase Law (share deal/asset deal)
Depending on who buys the company or which company share will be bought, a decision will be taken, as follows:
- By purchasing the “complete” company or a business unit (such a branch) with all assets, claims and obligations, you can freely dispose of your acquired property and use it, for example, as security for loans. It is a so-called Asset Deal, in which the items of property are transferred individually. Areas of application are the sale of individual companies and the sale of operating parts. Purchases by the insolvency administrator are also typically handled as an asset deal.
- By purchasing of shares (Share Deal), you will become a shareholder of an Ltd, for instance. The financial charges only correspond to the extent of the acquired business.
- The transfer of the business share is as expensive as the transfer of all assets.
The purchase of an existing individual company or the purchase of company shares may have a particular advantage over a new company:
- The company is already established on the market,
- Relations with customers and suppliers are established,
- The services and the products of the company have been introduced,
- The employees form a well-established team,
- The successor can build on the experience of the predecessor or the partners.
These advantages are considerable, only if you also fulfil the particular personal, managerial and professional requirements necessary to carry on a running business.
The design of the company purchase contract must be primarily based on the legal structure of the company as well as on tax and legal objectives. Before the conclusion of a company purchase agreement, the legal and economic conditions must be carefully elucidated (Due Diligence). From these clarifications depend the conditions of transfer, legal terms, and the reciprocal provisions for purchasers and sellers that will be stipulated in the contract.
In order to express the seriousness of the interest in the purchase and to determine the basic conditions, letters of intent, options or preliminary agreements are agreed upon before the purchase of the company. The preliminary contract is intended to oblige the conclusion of the main contract. In the preliminary contract, the essential questions of the company purchase agreement have already been settled. Whenever the main contract requires a certain form, this also applies to the preliminary contract.