The market in Vietnam is expected to continue to maintain a good growth momentum, bringing many opportunities to investors, especially in the field of M&A. We need to focus on 07 Things Important Issues Necessary When M&A Businesses…In order for you to better visualize that issue, Apolo Lawyers wishes to answer the most specific and clear. Please contact Hotline (+84) 903.419.479 for the best support of Apolo Lawyers.

The following article notes 07 Things Important Issues Necessary When M&A Businesses that you need to pay special attention to: 

1. On the legal aspect:

The legal basis for the M&A of Vietnamese enterprises is prescribed in Investment Law, Competition Law, Enterprises Law and other relevant legal documents. Therefore, investors need to understand the legal aspects to ensure the correct and complete implementation of Vietnam legal provisions in M&A Businesses, contributing to minimizing legal risks. for investors.

2. Financial report:

When conducting M&A projects, investors need to analyze, appraise, evaluate the quality of the company assets, check data, debt records, determine data on income and expenses, cash flow and internal control system, to ensure the highest possible reliability of the reporting data of the enterprise. Investors need to review the company financial statements and tax returns over the past 3-5 years to assess the company current financial position and future financial trends before conducting an M&A.

3. Employee plan:

The reduction of staff to be able to operate effectively is still an important issue when implementing M&A. The Labor Code stipulates that, upon M&A or consolidation, the enterprise must continue to use the existing number of employees and amend and supplement the labor contract. If they do not use all of them, they are entitled to unilaterally terminate the labor contract but must develop and implement a labor use plan, including sending them for retraining to continue using… In case of termination In accordance with the law, enterprises also spend a lot of money on unemployment benefits for employees.

4. Client:

The main purpose of business M&A is to take advantage of existing conditions to facilitate investors to develop in a new market. Therefore, investors need to learn about the number of customers, cooperation relationships and profits of the target business at the moment so that they can create a foundation for stabilizing, building and developing the number of customers. goods of the enterprise after the M&A. Customers are the most important assets of the company, must ensure that customers are as sustainable as other tangible assets.

5. Trademark:

Brand is considered an intangible asset of a business. Investors often choose businesses with famous brands that they target. Because the M&A of a branded business will save time, effort and cost of branding. However, the brand value is also proportional to the transaction value when acquiring the business. Therefore, investors need to price the brand in a reasonable way, in line with the budget in M&A project.

6. Conditions for business M&A:

According to Article 16 of the Competition Law , M&A and consolidation of enterprises is a form of economic concentration. Therefore, business M&A can only proceed when one of the following conditions is satisfied:

1. Enterprises after M&A or consolidation are classified as small and medium-sized enterprises as prescribed in Article 6 of Decree 39/2018/ND-CP
2. The market share of enterprises after the M&A or consolidation shall account for not more than 50% of the market share in the relevant market.
3. The market share of enterprises after M&A or consolidation accounts for more than 50% in the relevant market but falls under the exemption for prohibited economic concentration. Accordingly, there are 2 exempted cases:
4. One or more parties to the economic concentration are in danger of being dissolved or falling into bankruptcy.
5. The economic concentration has the effect of expanding exports or contributing to socio-economic development, technical and technological progress.

7. About tax obligations:

The merged enterprise is responsible for fulfilling its tax payment obligation before M&A the enterprise. If the tax payment obligation has not been fulfilled, the merging enterprise shall have to fulfill the tax payment obligation.

>>> See more: Main stages in an M&A process

>>> See more: Mergers and Acquisitions: What is the difference?

8. Service delivery process at Apollo Lawyers:

Step 1: Receive information and documents from customers.

The assistant lawyer forwards the client request to the Apolo Bar Council to receive and quote the legal service fee according to the agreement.

Step 2: Client and Apolo Lawyers company sign a contract of legal services and pay fees according to the original agreement.

Step 3: The lawyer sends the Client a list of documents to be provided in a transaction GHOST. After receiving all documents, the lawyer conducts an inspection and evaluation.

In case there is a problem that needs clarification, the Apolo Lawyers team will actively contact the target company for more information.

Step 4: Lawyers collect necessary documents from competent state agencies and related parties.

Step 5: The lawyer sends information to the client.

For further information, please contact us: Apolo Lawyers

APOLO LAWYERS