When planning an M&A deal, legal aspects matter in each country concerned from start to finish. Make sure you have a good legal team on your side in each country available around the clock. And should contingent consideration be used in case any surprises emerge?

Among the things they may have to consider are:

• Is the pre-deal legal situation clean? Product liability, contractual obligations legal claims pending and so forth.
• The international structure – countries, joint venture partners, minority interest
• Non-disclosure agreements and what happens if they are breached. Check the techies have added passwords and multiple authentication procedures.
• Preliminary agreements, sometimes know as term sheets or heads of agreement
• Main agreement
• Finance facilities and agreements
• How should the deal be framed? Share purchase? Asset purchase? Long term supply or licensing deal?
• Due diligence
• Tax issues.
• Intellectual property – how protected? Sometimes it isn’t, but may not be in the public domain yet?
• Risk mitigation measures.
• Representations and warranties on anything that cannot be fully verified
• Earn-outs for seller side personnel if all works out.
• Lock-up periods if share (stock) consideration used.
• Legislation e.g. antitrust rules.
• Government requirements e.g. licenses, approvals needed.
• Stock exchange requirements e.g. no insider trading.
• Labor law especially if layoffs expected.
• Employee ESOP agreements and implications.
• When and how to communicate (“sell”) the deal to customers, shareholders. management, employees, government, press.

Here’s a few not always noted:

• Corruption allegations?
• Exchange control restrictions in some countries on carrying out transactions or repatriating profits and capital
• Environmental issues.

This is just the tip of the iceberg, always consult lawyers in each country on all legal aspects.

Next Steps:

• Start planning with your lawyer the ingredients of your proposed acquisition or sale based on the above.
• Many of the surprises may be predictable with proper preparation.
• What is the other side really after? Can you and your lawyer read between the lines?
• Consult legal and professional advisors in each country concerned in specific cases.
• Contact us if you are looking for an M&A candidate to buy or sell.
• Contact us if you have your candidate and want to prepare for an M&A deal.

© Leon Harris 19.5.25, all rights reserved.  Email: [email protected],  Cell: +972-54-6449398.