Up to now, the M&A market in Vietnam is becoming the most important form of foreign investment. Before making a merger decision, legal due diligence is carried out. So after the legal due diligence process, what evaluations do lawyers often have? The below article by Apolo Lawyers (Tel: (+84) 903.419.479) will provide Clients with how Apolo Lawyers supports enterprises to perform the work after the LDD process.
For a particular matter, a lawyer may recommend that the client:
This proposal is made in case the problem cannot be remedied which could lead to illegal transactions.
This proposal is also made if the problem prevents the buyer from achieving the purpose when entering the transaction.
Before the legal review, usually the parties have shaped the expected transaction structure to comply with the law, reduce risk, or achieve their commercial goals. However, after the review process, the buyer realizes the risks from buying shares and/or buying assets, so the buyer decides to change to a safer transaction structure.
After reviewing, the lawyer found that there are issues that will affect the value of the target company. At this time, the lawyer can suggest that the buyer consider re-valuing the target company and thereby negotiate a reduction in the purchase price.
A contract between the parties can help to completely solve the problem or reduce the risk arising from the problems that the parties can foresee. Usually, the lawyer will suggest the buyer to handle the problem on the following terms:
An undertaking is often suggested to deal with matters relating to an event or condition of which the purchaser is the party that knew or ought to have known about the event or condition.
To deal with a problem, the buyer usually requires the seller to make a commitment to do something to remedy or limit the consequences of the problem if it is completely within the ability of the seller to do so.
By means of this provision, the buyer sets the condition for the obligation to pay and take ownership of the shares from the seller on the closing date. That is, in case the condition is not met, the payment obligation of the buyer has not yet arisen.
Usually, these conditions are objective, independent of the will of the seller.
The lawyer proposes to require the seller to undertake to reimburse if the buyer suffers a loss after completing the expected transaction but a pre-existing problem arises.
In addition to reducing the purchase price, a reasonable payment route and payment method will help the buyer reduce his risk.
>>>Read more: Legal due diligence in M&A transaction
>>>Read more: Why is legal due diligence important?
Identify the business of the clients objectives;
Identify the legal issues - these vary depending on factors like whether the deal is friendly or unfriendly;
Build a “road map” for the client from start to finish, and include a timeframe;
Advice on the deal and negotiating tactics;
Conduct due diligence on another side;
Determine - with the help of tax attorneys - the tax implications and if they require special structuring;
Work with antitrust attorneys to assess regulatory obstacles, gain regulatory approval and analyze any other required regulatory approvals;
If cross-border, work with local counsel. Review all the contracts of the clients: business, employment, outsourcing, debt instruments, preferred stock, etc;
Obtain third-party consents from lenders or parties to other contracts;
Negotiate agreement, sign, announce publicly, close the deal;
Attorneys for the target decide whether to negotiate, refuse overtures, sell, or do a deal with another company.
Apolo Lawyers is a law firm that has an experienced attorneys team will help Clients with legal needs relating to mergers and acquisitions. So, if our Clients need any help, do not hesitate to contact us via email at contact@apolo.com.vn or Hotline – (+84) 903.419.479 for the best legal advice and support.
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