If before the pandemic, companies used mergers and acquisitions to consolidate, diversify, enter into a new market, in the new economic landscape some companies want to acquire technological capabilities and transform their business models (for a greater financial and operational agility and focus on industry-specific dynamics) using mergers and acquisitions, and other companies affected by the pandemic want to optimize their portfolios (by selling poorly performing business lines or selling non-core assets), by restructurings/ reorganizations and de-mergers.
Within the merger and acquisition strategy, the environmental, social, and governance (ESG) factors have begun to be taken into account in investment decisions, with investors using ESG criteria to assess risks and identify opportunities to create value. It is also anticipated that more and more capital will be mobilized for the transition to green energy sources, creating opportunities for mergers and acquisitions, especially with regard to companies that innovate to develop new technologies for the future.
New ways have emerged for companies to identify investors for acquisitions operations and to conduct acquisitions or even mergers, such as crowdfunding platforms, STOs (Security Token Offerings), stock tokenization, and special purpose acquisition companies (SPACs). Some processes have also begun to be automated within the due diligence phase, for example, artificial intelligence (AI) has begun to be used by investment bank analysts to organize the data needed for the analysis.
The companies that carry out mergers and acquisitions are facing various challenges such as regulatory frameworks that are changing at the same time with the geographical area, due diligence, negotiation of agreements, obtaining consents/approvals, fulfilment of formalities related to economic concentration, and other formalities, process integration, employee management.
The integration process related to mergers and acquisitions has become increasingly complex: IT environments involve new technologies and cloud resources, the growing importance of data (given not only by their business value but also by the necessity to observe confidentiality, security, and compliance requirements), different or ever-changing regulatory frameworks.
By using legal services for regulatory issues, due diligence, negotiation of agreements, obtaining consents/ approvals, fulfilling formalities for mergers and other formalities, integration process, the entrepreneurs, the companies, and the investors (Private Equity/PE or Venture Capital/VC) are assuring the success of ongoing projects by eliminating or reducing legal risks.
NewLegalWay provides legal advice on Mergers and Acquisitions on the following aspects:
Acquisitions of shares, goodwill/business line, assets, receivables
- Preparation for the discussions with potential investors (review of presentation materials, advice on future shareholding structure and corporate governance aspects) and assistance during these discussions;
- Assistance in preparing and organizing the Virtual Data Room (VDR);
- Drafting of Non-Disclosure Agreements (NDAs), Letter of Intent, Memorandum of Understanding (MoU), Brokerage/ Intermediation Agreements, Non-Binding Offer, Binding Offer, Terms Sheet;
- Analysis of economic concentrations and analysis of the necessity to notify the Competition Council in the context of various operations (transfer of shares, change of control) and drafting the notification for the Competition Council;
- Due Diligence and drafting the due diligence report on the company to be acquired, the assets/ goodwill/ receivables to be acquired;
- Drafting / negotiating documentation related to the transaction, including the share sale-purchase agreement (Sale Purchase Agreement-SPA), the Shareholders Agreement including option clauses (Call Option, Put Option, Tag Along, Drag Along), the articles of incorporation, decisions of the General Meeting of Shareholders / Associates (GMS), register of shareholders, documents related to the Signing, monitoring of Conditions Precedent (CPs) and the documents related to the transfer (Closing) and implementation of the transaction;
- Legal assistance regarding goodwill/business transfers, drafting, and negotiation of Business Transfer Agreement;
- Drafting, modifying, and negotiating receivables sale-purchase agreements and asset sale-purchase agreements;
- Registration of assignment of receivables and guarantees to the National Registry for Movable Publicity (RNPM), drafting notifications for third parties;
- Drafting loan agreements granted by shareholders/associates to companies;
- Legal advice on the relationship with investors (Private Equity fund, Venture Capital fund, strategic investor, private individual investor), change in the management and organization of the company;
- Legal assistance in the merger process regarding the merger project, statutory decisions, merger schedule, court approval, registration with the Trade Register and implementation of the merger;
- Analysis of economic concentrations and analysis of the necessity for notification to the Competition Council in the context of various operations (merger, change of control) and drafting the notification for the Competition Council;
- Due Diligence and drafting due diligence report on the companies -participants in the merger;
- Legal assistance in the integration process related to mergers concerning agreements, data, and employees;
- Drafting / revising documents for the general meetings of shareholders in S.A. (joint-stock company) and participation in such meetings;
- Corporate Governance including GMS decisions, decisions of the Board of Directors, the Management Committee and other committees, amendments to the articles of association, management agreements, establishing management duties, the delegation of duties, reporting and information obligations, shareholders’ rights, and the relationship among them and the management, drafting / amending internal procedures regarding the adoption of decisions, codes of conduct.
- Legal advice provided to companies in financial difficulty regarding the restructuring by the sale of assets and/or obtaining a financial package from a creditor and the setting up of the related guarantees;
- Legal advice provided to companies intending to consolidate their market position or streamline their activities either by reorganizing operations, by de-merger, by restructuring loans and by drafting/negotiating related documentation;
- Drafting and negotiating Reorganization Agreement, Shareholders Agreement, dividend policies, decisions of the General Meetings of Shareholders / Associates, articles of incorporation;
- Legal assistance and representation regarding the de-merger (draft de-merger, statutory decisions, de-merger schedule, court approval, registration with the Trade Registry);
- Drafting / negotiating joint-venture agreements, partnerships agreements;
- Consultancy and legal assistance regarding the voluntary dissolution (decisions of the General Meetings of Shareholders / Associates, articles of incorporation, notifications, dissolution procedure in front of the Trade Register).