AC - Legal Departments

Question 1

What do the Corporate team do in an M&A transaction?

Answer 1

• Act as the main coordinator for the deal, connecting the client with other teams.
• Prepare the due diligence report, summarising key risks and issues based on information from specialist teams. (more buyer)
• Negotiate and draft the main sale agreement document. This is a SPA (share purchase agreement) in a share sale, or an APA (asset purchase agreement) in an asset sale. (both)
• Draft the disclosure letter. (more seller)

Question 2

What is a disclosure letter?

Answer 2

A formal doc given by seller of a business to the buyer outlining the facts that may affect the buyer’s decision to purchase, or the value of the company.

More specifically, the seller sets out any information that contradicts the promises and statements (representations and warranties) made to the buyer in the sale and purchase agreement.

Question 3

What do the Banking and Finance team do in an M&A transaction?

Answer 3

• Help arrange funding for the deal, whether through loans or investments.
• Draft agreements that set out the terms for the funding (called a facilities agreement).
  (buyer and lender’s solicitors)

Question 4

What do the Employment team do in an M&A transaction?

Answer 4

• Review the target company’s employment contracts as part of the due diligence process.
• Advise on employee-related matters, like how TUPE laws protect workers in takeovers, pension issues, and any necessary discussions with trade unions.
  (buyer’s solicitors)

Question 5

What do the Real Estate team do in an M&A transaction?

Answer 5

• Review property leases to check for any issues, like tenant rights or maintenance responsibilities buyer should be aware of.
• Advise on the need for any surveys or inspections. (buyer’s solicitors)

Question 6

What do the Tax team do in an M&A transaction?

Answer 6

• Check if the target company owes any taxes or has disputes with HMRC. Any findings are included in the due diligence report.
• Advise on structuring the deal in the most tax-efficient way (to minimise taxes for both the buyer and the seller)

(Buyer focuses on due diligence, both focus on efficient tax structuring)

Question 7

What do the Competition team do in an M&A transaction?

Answer 7

• Review whether the deal might raise competition concerns, like having too much market power.
• Handle filings with regulators like the CMA.
  (buyer’s solicitors)

Question 8

What do the IP team do in an M&A transaction?

Answer 8

Check whether the company owns or licenses its intellectual property (e.g. patents or trademarks) and ensure it’s legally protected. Any findings or recommendations are included in the due diligence report.

This is especially important for tech or creative businesses.
(buyer’s solicitors)

Question 9

What do the Litigation team do in an M&A transaction?

Answer 9

• Review any ongoing lawsuits or legal risks associated with the target company, and include findings in the due diligence report.
• Draft wording for the SPA to protect the buyer (such as indemnities or warranties).

(buyer’s solicitors)

Question 10

What is an indemnity?

Answer 10

security or protection against a loss or other financial burden.