Structuring M&A transaction

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Points to consider when structuring an M&A transaction (sale and purchase of shares)

1. Whether the shares, which are the subject matter of the sale and purchase (“Sale Shares”), a majority or minority stake?

2. Are the Sale Shares ordinary shares or preference shares or a combination of both?

3. If the Sale Shares include preference shares, what are the terms of the preference shares?

4. How much is the consideration for the sale and purchase?

5. Will the consideration be satisfied in cash or by issuance of shares or a combination of both or other method?

6. Will the consideration be paid in one lump sum or several tranches?

7. Does the seller have any nominee director on the board of the target company? If so, do the parties require the nominee director to resign?

8. Will there be appointment of director nominated by the purchaser?

9. Is there an existing shareholders’ agreement between the shareholders?

10. Is the sale and purchase of the Sale Shares subject to notification to or approval from any regulators or third parties?

11. Has the seller provided any loan to the target company or guarantee any loan on behalf of the target company?

What would you add to the list?

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#mergersandacquisitions

This post was first posted on Linkedin on 17 September 2021.

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