Things to note when negotiating and signing M&A contracts

Article overview

Negotiating and signing M&A contracts is an important step in the process of implementing merger and acquisition transactions. M&A contracts not only reflect the terms of the agreement but also directly determine the rights and responsibilities of the parties involved. So what should you keep in mind when participating in negotiating and signing to achieve optimal results? Please follow Long Phan’s following article to immediately pocket important information when performing M&A transactions.

Things to know about negotiating and signing M&A contracts
Things to know about negotiating and signing M&A contracts

What is M&A? What common forms of M&A are there?

M&A (Mergers and Acquisitions) is a merger and acquisition activity between businesses with the goal of expanding scale and growth. Currently, there are 3 basic forms of M&A implementation as follows:

1. Vertical M&A (Vertical M&A)

This form occurs when companies in the same supply chain, but at different stages of the production process, merge. This helps businesses better control raw material supplies, optimize production costs, improve input quality, while increasing management capabilities and maximizing profits.

2. Horizontal M&A (Horizontal M&A)

This is a merger between companies that provide similar products or services at the same stage of production. This form helps reduce costs, expand the market, improve competitiveness and control the market more effectively thanks to the combination of competitors in the same field.

3. Conglomerate M&A (Conglomerate M&A)

This form occurs when companies are not directly related to each other in terms of products but serve the same customer group. This combination helps businesses expand their product portfolio, improve customer service, and minimize risks when expanding into new business areas. At the same time, businesses can also grow revenue through diversification.

Benefits when performing M&A?

After M&A deals, businesses often gain many significant benefits, supporting the growth and expansion of business activities. Specifically:

  • Market expansion: Reach new customers and increase market share.
  • Rapid Growth: Scale without having to build from scratch.
  • Diversify products/services: Expand product portfolio, reduce risks and meet market needs.
  • Cost Optimization: Combine resources and processes to reduce costs and increase efficiency.
  • Enhance competitiveness: Strengthen competitiveness and enhance position in the market.
  • Technological innovation: Improve product and service quality thanks to advanced technology.
  • Financial growth: Optimize capital flows and reduce financial costs.
  • Reduce risk: Diversifying products and markets helps reduce risk.

Important issues that need to be kept in mind during the process of negotiating and signing M&A contracts

During the process of negotiating and signing M&A contracts, parties need to pay attention to important factors to ensure smooth and legal transactions. Issues to note include:

  • Determine transaction goals: Clarify business goals, such as market expansion, technology development or financial improvement.
  • Due Diligence: Check assets, liabilities, contracts, and financial factors to ensure accuracy.
  • Business valuation: Ensure the transaction value accurately reflects the current status and potential of the business.
  • Contract terms: Clarify important terms such as transaction value, payment method, and warranty commitment.
  • Comply with legal regulations: Make sure to carefully research legal regulations and seek approval from authorities if necessary.
  • Information security: Sign a confidentiality agreement (NDA) to protect sensitive information.
  • Handling labor and human resources issues: Re-evaluating labor contracts and key employee retention strategies.
  • Integration plan: Plan to integrate operations, culture and systems after M&A.
  • Risk management: Assess and handle potential risks in transactions and external factors.
Important contents when negotiating and signing M&A contracts
Important contents when negotiating and signing M&A contracts

Process of providing negotiation, negotiation and signing of M&A contracts at Long Phan

At Long Phan, consulting and support services for negotiating and signing M&A contracts are carried out through a professional process, ensuring maximum benefits for customers and minimizing risks. The specific process includes the following steps:

  • Receive and evaluate requests: Determine transaction goals and related legal factors, make a preliminary assessment of the business situation and customer requirements.
  • Legal and financial due diligence: Conduct legal due diligence to assess legality, check assets, debts, contracts, disputes, and tax obligations.
  • Contract negotiation: Support in building negotiation strategies, focusing on important terms such as transaction value, payment method and compensation liability.
  • Drafting and reviewing contracts: Drafting detailed and strict M&A contracts, ensuring legal compliance and minimizing risks.
  • Support for signing and implementing contracts: Complete legal procedures, obtain approval from relevant parties, and support the implementation of obligations arising after signing the contract.
  • Dispute resolution and contract adjustment: Support dispute resolution or contract adjustment through mediation, arbitration or court, ensuring transactions take place safely and legally.

Our effective and professional consulting and support services in M&A transactions

Long Phan provides comprehensive consulting and support services in mergers and acquisitions (M&A) transactions, ensuring effective solutions, minimizing risks and optimizing benefits for customers. Our services include:

  • Consulting to support the development of M&A strategies suitable for goals such as expanding the market, improving finances or increasing brand value, ensuring feasible and effective solutions.
  • Support accurate business valuation, accompanied by legal and financial risk analysis, creating a basis for negotiation and decision making.
  • Support negotiation and drafting of contracts to protect customer interests and ensure complete accuracy, clarity and compliance with the law of the contract.
  • Support completing legal procedures such as asking for shareholders’ opinions, registering a change of ownership, and notifying state agencies, ensuring the process takes place quickly and legally.
  • Support dispute resolution through arbitration, mediation or court, and advise on reorganizing the structure and development strategy after the transaction to optimize benefits.
Consulting and supporting professional M&A implementation at Long Phan
Consulting and supporting professional M&A implementation at Long Phan

Negotiating and signing M&A contracts is a process that requires professionalism and legal knowledge to ensure the best benefits for the business. With a team of experienced consultants, Long Phan will accompany customers in every transaction, providing effective and safe solutions. Please contact us via the hotline 0906735386 for detailed advice and timely support!