[COVID-19] Mergers and Acquisitions

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Given the unusual circumstances of running a business during a pandemic, many companies are looking to change how they do business, including mergers and acquisitions.

What are Mergers and Acquisitions?

Mergers and acquisitions (“M&A”) are transactions where the ownership of companies is transferred or consolidated with other entities. Businesses may seek to merge with a larger, more established company to better ensure its long-term existence. On the other hand, larger and more well-positioned companies may decide the time is right to acquire a competitor or complimentary business to add to its business or improve its competitive position.  

Factors to Consider in a Merger or Acquisition Transaction

Below is a list of just a few of the aspects you are likely to confront in a merger or acquisition:

Three typical methods to acquire a business:

  • Purchase of the company’s assets
  • Purchase of the company’s stock
  • Direct or indirect merger with the company

Preliminary Agreements:

  • Term Sheet
  • Confidentiality Agreement
  • Exclusivity Agreement

Due Diligence:

  • Determine the value of what you’re getting
  • Understand the specific assets and liabilities involved
  • Decide how to acquire and restrictions on future use
  • Create a plan for integration of operations
  • Provide disclosures

The Agreement:

  • Merger Agreement
  • Stock Purchase Agreement
  • Asset Purchase Agreement

Closing and Post-Closing:

  • Delivery and execution of documents
  • Closing certificates
  • Third-party consents
  • Other related agreements
  • Transition plan
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