M&A: What to do if there’s problem?

Linkedin Post

What choices does a buyer have if the buyer’s due diligence reveals issues with the company or assets which the buyer intends to acquire?

If the buyer intends to proceed with the acquisition and requires the issues to be addressed, the parties may consider the following:

1. Seller to indemnify the buyer or target company from damages and losses arising from the issue in question.

2. Retention of part of the consideration after completion of the sale and purchase until the seller rectifies the issue within an agreed period of time.

3. Rectification of the issue to be made a condition precedent to the agreement. The agreement would not be completed unless the condition precedent is fulfilled (i.e. the issue rectified) by the seller.

4. Adjustment or reduction of price.

What would you add to the list?

#malaysiancorporatelawyer
#mergersandacquisitions

This post was first posted on Linkedin on 1 September 2021.

Linkedin Post
Five key steps for legal due diligence

Most lawyers are good at identifying issues, but legal due diligence shouldn’t be limited to merely reviewing documents and identifying issues. Here are my five steps for conducting legal due diligence: 1. Identify the issues based on the scope of legal due diligence as agreed with the clients. 2. Provide recommendations …

Linkedin Post
Begin with the end in mind: Post-completion integration

I once worked on an M&A deal that took more than a year to complete. While the deal was not inherently complex, it dragged on due to delays in finalizing the details of the transaction agreements for reason beyond my control. As the deal involved a larger corporation acquiring a …

Lawyering
Being a Corporate Lawyer: Why I Do What I Do

After years of demanding schedule and juggling simultaneous corporate exercises which take a toll on physical and mental health, it is not surprising that some corporate lawyers experience burnout. Unlike some legal practice areas, the work of a corporate lawyer may not seem immediately impactful or “make a difference” to …