Writers: BLawyers Vietnam
1. Why is it callable as a mergers and acquisitions lawyer?
Lawyers who usually assist clients in a particular legal area are often referred to as lawyers in that area. For example, corporate lawyers, investment lawyers, labor lawyers, litigation lawyers, divorce lawyers, etc. For lawyers who often assist in mergers and acquisitions (M&A) transactions, they are called as mergers and acquisitions lawyers (M&A lawyers or Mergers and Acquisitions Lawyers).
2. Role of Mergers and Acquisitions Lawyers
M&A lawyers often play the role of “guide” and “connector” for M&A transactions. In an M&A, M&A lawyers must work very hard to help the M&A transaction take place and be completed according to the plan of the seller and the buyer.
3. Specific role of mergers and acquisitions lawyers
a. Expression of intent stage
In mergers and acquisitions transactions, the first stage in the transaction process involves the seller and the buyer to meet and discuss their intentions. Accordingly, the parties often need to prepare documents recording preliminary outline of the entire M&A transaction, such as:
- letter of intent;
- term sheet; or
- memorandum of understanding (MOU).
M&A lawyers started participating in the role of supporting the seller in preparing the above-mentioned documents. The buyer can ask its M&A lawyers to help explain and check the seller’s intentions through those documents. Although those documents are not too long and the contents are concise, they contain the possibility of an extremely large asset transfer and affection to several people in the future.
Most of the information discussed during this period is not legally binding on both-side parties. However, the fact is that there have been many cases where M&A transactions disputes arise from these first intentions. Therefore, the parties need people who can fully and accurately understand and explain their intentions. In some cases, M&A attorneys also act as a guarantor of confidence for the buyer or the seller.
b. Target company appraisal stage
The next stage, before the buyer makes the acquisitions wholly or partly over an enterprise/ project in Vietnam, the buyer usually requires the seller to have M&A lawyers involved. The M&A lawyers will prepare documents such as a legal due diligence report or a disclosure letter. M&A lawyers will prepare those documents based on official and real documents of the enterprise, to ensure the accuracy and truthfulness of its matters. One of the main reasons that the buyer requires the above-mentioned documents that are prepared by M&A lawyers is lawyers’ professional reputation and legal practice ethics to ensure the objectivity of the documents. It is true that professional ethics has helped M&A lawyers become the ones that guarantee confidence for mergers and acquisitions transactions that they provide legal support.
c. Transaction negotiation stage
The role of M&A Lawyers is clearly seen in:
- Working with the parties to the transaction. Most M&A transactions have the participation of many parties (buyer, seller, parent companies and subsidiaries from many countries, credit institutions sponsoring the transactions, etc.) and often go through many stages with relatively complex level.
- Supporting to advise on the transaction structure to ensure the shortest transaction execution time, mitigate potential risks and lowest transaction costs (mainly tax savings).
- Assisting in drafting documents to officially record M&A transactions and legally binding between parties, such as: shareholder agreement, share subscription agreement, share sale and purchase agreement, memorandum and articles / charter, non-disclosure agreement, a deed of non-competition agreement, and other documents agreed by the parties.
- Supporting to negotiate the drafted documents, help the parties close the transaction successfully.
4. Requirements for M&A Lawyers
To best support clients in an M&A transaction, M&A lawyers are often very quick and have good knowledge, business mindset and legal thinking. M&A lawyers must design a simple and easy-to-understand transaction structure to present to the seller / the buyer and analyze pros and cons of the transaction structure for the parties to consider and decide. At this time, the role of M&A lawyers is extremely important, they ensure that transactions done legally, safely and financially effected for all parties.
At the document preparation stage, the M&A lawyers must be able to translate the “design” into clear, complete and overarching terms of the entire transaction.
During the negotiation phase of an M&A transaction, the parties may not find a common voice such as payment terms, handing-over assets, transferring risks, receiving and using existing personnel, etc. M&A lawyers will be the person to connect the parties to finalize a common solution, avoid the worst case scenario is the transaction failure (break deal) when dispute arisen.
Maybe you are interesting in reading: What should employers in Vietnam note when they restructure workforce after M&A deals or Illegal use of foreign currency in transactions in Vietnam.
In summary, for a successful mergers and acquisitions transaction, M&A attorneys play a very important role. From time to time, they must hold different roles and need to fulfill those roles.
With many years of practical experience supporting mergers and acquisitions in Vietnam with the participation of both domestic and foreign parties, BLawyers Vietnam’s M&A lawyers is looking forward to supporting in M&A transaction. For further details, please contact us at email@example.com.