International M&A transactions (mergers and acquisitions)
The acronym M&A is often used in the field of commercial law. This term stands for “Mergers and acquisitions” and is mostly used in the field of commercial law to refer to the purchase and sale of companies. Being part of an M&A process in Spain entails a high level of dedication and excellence in all the activities to be carried out, as it requires a high level of technical expertise in this specific area of corporate law.
In order to advise and execute an M&A transaction (merger, demerger, transformation, contribution, corporate acquisitions and/or business units) it is necessary to have extensive knowledge in commercial law, but above all in the special law that regulates this area of company law: Law 3/2009, of 3 April, on structural modifications of commercial companies.
At LAWANTS we have lawyers and economists who provide legal and financial assistance to our clients throughout the transaction, minimizing the risks of acquiring or merging with a Spanish company through an ad hoc Due Diligence of the Spanish target company, and resolving the complexities that any commercial transaction of this magnitude can generate.
Professional advice on Mergers and Acquisitions
When one of our clients decides to take part in an M&A transaction to merge with a Spanish company or to acquire a Spanish company, our lawyers and financial advisors are in charge of providing the client with a clear and complete vision of the target company in Spain, so that our client can decide whether to go ahead with the M&A operation.
This advice is provided in a personalized manner to each of our clients, respecting the timeframe set by the parties to execute the transaction in order to ensure its successful completion.
LAWANTS has great experience in advisory services, and thanks to its Team of Lawyers and Accountants is able to approach extraordinary M&A transactions (especially in the industrial sector) with a comprehensive view considering all aspects, both legal and economic, of each transaction.
Procedure for the Merger and Acquisition
of a company
In order for an M&A transaction in Spain to be completed successfully, the parties involved will set out a series of steps throughout the procedure, which are almost always the same:
1. Identification of the potential target company: the buyer or the company that intends to merge with another company in the Spanish market must carry out an analysis of the sector to identify the target company.
2. Valuation and preliminary review: in this phase, a detailed analysis of the company should not be completed, but rather an initial valuation of the business to study the viability of the operation.
3. Negotiation between the parties and “Letter of Intent”: the M&A lawyers must negotiate together with the clients the letter of intent, the objective of which is to make it as suitable as possible for the future M&A operation in Spain.
4. Due Diligence Process: the lawyers and economists of the acquiring party must be able to make a detailed review and study of all the documentation that may be relevant to decide whether to acquire or merge with the target company.
This documentation includes important documents such as contracts with customers and suppliers, company and corporate documentation of the company, pending litigation, etc.
5. Negotiation and purchase and sale agreement (SPA): the so-called “Sale and Purchase Agreement” is the Purchase and Sale Agreement between buyer and seller.
The negotiation of this agreement is key to regulate the terms of the commercial transaction. This document will be similar to the Letter of Intent signed between the parties at the beginning of the M&A transaction in Spain, but the SPA will go into much more detail on points such as the obligations entered into by the parties and one of the most important clauses: the representations and warranties.
From our experience in the M&A sector, all clauses relating to the payment and guarantee of the same are also subject to discussion.
6. Post-deal: Once the target company purchase agreement has been signed between the parties (in the case of a company acquisition), the integration of the acquired company must be carried out.
Due Diligence in Spain
The term Due Diligence refers to the duty of diligence with which any purchaser or investor must act. In the commercial field, this term is used in M&A operations, so that the buyer is aware of the potential risks involved in the purchase of the target company in Spain, in order to make the decision to continue with the acquisition process before making a final decision.
At LAWANTS, our M&A lawyers and economists have extensive experience in conducting legal, tax and accounting due diligence. These Due Diligences have helped our clients to take the decision to proceed with the M&A transaction and acquire the target company in Spain, and on other occasions, the Due Diligence performed by our lawyers and economists, experts in company law, has led our clients to take the decision not to proceed with the M&A transaction, as they have identified elements that advise against the purchase of the company.
The assistance and advice of lawyers and accountants specialized in M&A transactions will allow you to evaluate the role of the merger and the consequences in your business strategy. In addition, it will enable you to realistically assess your objectives and evaluate your target companies using the best negotiation tactics and avoiding the most common and frequent mistakes in Spain.
Our firm will enable you to skillfully approach negotiations by obtaining the best possible terms, managing the cultural challenges and different legal systems that you will face abroad once the M&A deal is concluded.
In other words: after an initial study phase through Due Diligence, you must not only complete the extraordinary M&A transaction, but also successfully perfect the post-acquisition integration to generate the maximum long-term value of the extraordinary transaction with the target company in Spain.