Mergers & acquisitions
For a corporate acquisition, both parties, the buyer and the seller, regularly need expert and experienced legal advice. The task of the legal advisors is to hedge against the many risks that may arise primarily due to the uncertain future development of the sold enterprise. If such uncertainties are not resolved with foresight, disputes following the corporate transaction can hardly be avoided. At the same time, however, it is important for the advisors involved not only to make the intended transaction more difficult by identifying risks, but above all to find creative solutions in cooperation with the parties and other advisors in order to ultimately make the sale of the company possible.
Even before a company is sold, it is important to determine which parts of the company or the assets of the seller are to be sold. It is not only a question of whether the assets to be sold can be expediently separated from the remaining assets of the seller, but also whether a company results which is attractive for buyer. In practice, for example, the question regularly arises as to whether real estate used for business purposes should also be sold or whether it should be leased to the company by the seller after the sale of the company. Before the actual acquisition process, in the context of which the (potential) buyer gains insight into internal company affairs, it is important to exclude the use of such information for purposes other than the intended corporate transaction by concluding non-disclosure agreements. In many cases, further preliminary agreements, such as letters of intent, are concluded before the conclusion of a binding corporate acquisition agreement, the content of which may include the granting of exclusivity.
Since the seller is generally only prepared to provide limited (and moreover disputable) warranties for the condition of the company, while excluding corresponding warranties, a detailed examination (so-called “due diligence review” of the company by the buyer) is required before the acquisition. To a lesser extent, an appropriate review may also be useful for the seller in order to determine the risks which exist in the company and must be taken into account when drafting the contract.
In negotiating the corporate acquisition agreement, the previously identified special features and specific risks of the company must be taken into account as must the company development anticipated for the future, which in many cases should also have an effect on the purchase price.
After the signing of the corporate acquisition agreement, further legal requirements for the execution of a corporate acquisition agreement (the so-called “closing”) must be regularly fulfiled, such as obtaining antitrust approvals in certain cases or fulfiling requirements for financing.