The M&A market in Emerging Europe is growing quite rapidly.
In 2023 alone, nearly 1,200 M&A (merger and acquisition) transactions have been recorded. Mergers and Acquisitions).
Co sprawia, że przedsiębiorcy decydują się na fuzję przedsiębiorstw lub przejęcie firmy?
Czy warto decydować się na wsparcie kancelarii prawnej?
Structural changes within companies are one way to strengthen a company’s market position.
The assets of all merging companies accumulate, allowing for more extensive investments.
In practice, M&A transactions can be planned in one of two ways:
A merger can occur through an acquisition or the formation of a new company, while a takeover, understood literally, seeks to annex an entity through the purchase of shares.
Although theoretically the rules for carrying out mergers and acquisitions are regulated by the Commercial Companies Code, in practice each such transaction looks quite different.
The terms of the transaction are set individually, and the effectiveness of the entire process depends on correctly identifying the specifications of the operation.
That is why it is so important, among other things.
A thorough due diligence (possibly vendor due diligence, depending on who will initiate the merger).
Mergers and acquisitions of companies bring many benefits – provided they are carefully planned and properly executed.
What are the most common motives behind M&A decisions?
Merging two companies operating in the same industry allows for faster expansion and reaching new customer segments and markets.
Restructuring also helps better defend against the actions of unfair competition and increases the entity’s resilience to market fluctuations.
Increasing the scale of operations contributes to an increase in the value of an enterprise.
As a result, it is easier to implement new business initiatives or obtain financing on favorable terms.
A new entity can earn a higher return on its operations while reducing margins and fees.
The merger of several entities into one results in increased management efficiency, as it eliminates the links between full-fledged market participants.
The fewer these ties, the easier it is to manage the company and model it to the needs of investors.
M&A transactions also promote technological development.
Through the passage of trademarks, industrial designs, patents or copyrights, the portfolio of products and services offered can be expanded.
This, in turn, makes business more competitive.
Investors are often interested in the course of M&A.
However, years of practice show that there is no single recipe for restructuring.
However, it is possible to isolate a kind of algorithm of action that will look similar in each case.
Each transaction begins by determining whether the operation is to involve all of the company’s assets, or perhaps only a portion of the company.
The seller also decides whether to:
Due diligence plays a critical role in the merger or acquisition process.
Before companies decide to voluntarily merge or an acquisition takes place, the parties to the transaction should conduct an audit of the legal and business risks associated with the planned operation.
Before a deal is signed, the parties negotiate its terms, working out the best strategy to follow.
Even the biggest deal can be doomed by a simple mistake, which is why using professional help at each stage of M&A is important from the very beginning.
The implementation of M&A is not only the sale of shares or stocks.
Sometimes it will be necessary to obtain the approval of the antitrust authority for the acquisition of control, the transfer of specific assets (e.g., real estate, business, IP rights), or the consent of majority shareholders or corporate bodies.
It is not enough to merge two companies together for them to start operating smoothly. It is essential to have the so-called. PMI (Ang. Post-Merger Integration). It aims to merge the business by linking together the management sphere and individual departments, such as marketing, IT, production or finance, and ensure that business processes run smoothly.
It is worth remembering that the acquisition of one company by another is not mathematics, and it does not come down to the fact that the value of the shares of the new company is added to the assets of the existing one.Specialists who deal with M&A processes on a daily basis talk about the the synergy effect. It’s a situation where two businesses combined will produce an effect greater than each would have separately. A wisely conducted M&A provides just this surplus – otherwise it will be just a simple transfer of assets.
The law firm Marszałek & Partners provides its clients with comprehensive assistance that translates into increased value for their business. Get support from experienced advisors who will conduct a financial and legal analysis and guide your company through it step by step.
Meta title: corporate mergers and acquisitions in business law. What is worth knowing about them?
Meta description: corporate mergers or acquisitions in commercial law – what are M&A transactions, how are they conducted and what is the role of a law firm in them?Link to analysis in Contad:https://app.contadu.com/analysis/content-preview/5989e20cadbc9b61/f8ffd92020f34945479066ffda89d1825d3