Mergers and Acquisitions (known in international terminology as M & A) are generally considered growth methods reserved for large, well-capitalized companies owned by investors. A merger can also take place between companies registered in different Member States of the European Union (cross-border merger), the procedure being somewhat similar to the local one.

The mergers and acquisitions market is not only interesting for large domestic companies, but also for foreign ones that show a growing interest in taking over local assets.

The partial or complete acquisition of a Romanian company involves a legal, fiscal and financial analysis. Our team of professional lawyers specialized in mergers and acquisitions can help you, starting with the preparation of the documentation through the due-diligence process, to the preparation and negotiation of the sales contract.

Our M&A lawyers provide legal assistance during bidding procedures and/or direct negotiations, ensuring legal services, including legal due-diligence, in order to assess key issues highly significant for your final goal (corporate issues, real-estate, commercial contacts, financial agreements, authorization and licensing, competition compliance, IP protection compliance). In addition, the Hammond Partnership provides professional services focused on commercial transactions, court litigation, commercial leases etc.

The main areas of consulting services of M&A lawyers are:

 

Preparation and negotiation of pre-contracts (eg letters of intent, confidentiality and exclusivity contracts);
– Structuring and conducting transactions;
– Drawing up and negotiating the necessary contracts for transactions and accompanying documents;
– Services subsequent to the conclusion of contracts, including restructuring after purchase / sale;
– Review of contracts that could be affected by the merger;
– Consultancy regarding financing of acquisitions;
– Merger transactions and acquisitions in crisis and insolvency situations;
– Implementation of guarantee claims and damages from the acquisitions of companies;

 

The reorganization of the company in the context of a purchase

There are situations when a company acquires the shares of another company and, after the acquisition, the buying company merges with the acquired company.

A common example is one in which the acquisition is structured as a leveraged buyout (an acquisition with a complex financing and guarantee structure) when the two companies merge (post-acquisition) in order to satisfy the financing and guarantee conditions, imposed by the lender.

What is a merger?

The merger is a process of reorganization of companies by which either a company absorbs one or more companies (the absorbed companies thus ceasing to exist) or two or more companies merge and form a new entity, the merging companies following in turn cease to exist as a consequence of the merger process. The terms “mergers” and “acquisitions” are often used interchangeably, although they hold slightly different meanings. When one company takes over another entity, and establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer absorbs the business, and the buyer’s stock continues to be traded, while the target company’s stock ceases to trade.

The merging companies must draw up a draft merger which will include several elements, including:

the form, name and registered office of the merging companies;

the substantiation and conditions of the merger;

the conditions for allocating the shares or shares.

In conclusion

Our team of lawyers has many years of experience in selling or buying businesses, setting up a joint venture, merging, and offering consulting services on managing a successful business. Over the last few years, Hammond and Partners lawyers have provided legal assistance and legal advice on various national and cross-border transactions, including mergers and acquisitions, partnerships and purchase or sale of shares in the company’s share capital.

Whether we are referring to the complexity of mergers or acquisitions, or we are talking about consulting for various international players interested in investing in Romania, the clients of our law firm can be confident that they will benefit from the best legal advice to get the best and appropriate decisions.

 

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