Mergers and Acquisitions Law
What are Mergers and Acquisitions?
Mergers and Acquisition (M&A) Law deals with the laws affecting the purchase of one company by another (an acquisition), or the blending of two companies into a new entity (a merger).
A merger is a process by which two companies join and one new company continues to exist. Also called a consolidation, a merger occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies remains independently.
Acquisitions involve a process by which one company acquires the assets of another company. An acquisition, or takeover, is the purchase of one business or company by another. Acquisitions are usually divided into either "private" and "public" acquisitions. The distinction depends on whether the stocks of the target company is publicly traded or not. Acquisitions can also be categorized as “friendly” or “hostile” depending on how the target company perceives the acquirer.
Federal Trade Commission
The Federal Trade Commission (FTC) ensures that these transactions are compliant with fair competition and antitrust laws. There are always concerns about anti-competitive behavior in these transactions, and the consolidation of too large a portion of the market share in a single entity.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) also plays a role in these transactions, ensuring that a purchase is not made via illegal activities such as insider trading, improperly devalued stocks, or other inappropriate conduct.
Because of the unique complexities of the mergers-and-acquisitions process, a unique industry has grown up around it with a number of law firms, accountants, stock brokers, and other business experts dedicating their practices to it. If you have questions about the laws relating to mergers-and-acquisitions, you can review the materials below for additional information. Moreover, you can contact an attorney in your area specializing in M&As by visiting our Law Firms page.
Mergers and Acquisition Law - US
- ABA - Committee on Mergers and Acquisitions
The Committee on Mergers and Acquisitions (formerly the Committee on Negotiated Acquisitions) is part of the American Bar Association Section of Business Law. Founded in the late 1980s, the Committee has over 3,500 members, including practitioners from 49 states, five Canadian provinces and more than 39 different countries on five continents. The Committee's primary focus is mergers and acquisitions (M&A) and related transactions. The Committee's work addresses not only the legal substance of M&A transactions, but also the process of negotiating and documenting them.
- Astute Diligence - Mergers and Acquisitions Due Diligence Checklist
Due diligence checklists provide a starting point for the due diligence effort. This document gathering effort is augmented with many other techniques, including management capability assessments, benchmarking of operational performance, interviewing customers and suppliers, and analysis of business models and projections.
- DOJ - Merger Enforcement Guidelines
These Guidelines outline the present enforcement policy of the Department of Justice and the Federal Trade Commission (the "Agency") concerning horizontal acquisitions and mergers ("mergers") subject to section 7 of the Clayton Act,(1) to section 1 of the Sherman Act,(2) or to section 5 of the FTC Act.(3) They describe the analytical framework and specific standards normally used by the Agency in analyzing mergers.(4) By stating its policy as simply and clearly as possible, the Agency hopes to reduce the uncertainty associated with enforcement of the antitrust laws in this area.
- FTC - Bureau of Competition - Mergers and Acquisitions
The Bureau of Competition is committed to preventing mergers and acquisitions that are likely to reduce competition and lead to higher prices, lower quality goods or services, or less innovation. In most cases, the Bureau receives notice of proposed mergers under the Hart-Scott-Rodino (HSR) Amendments to the Clayton Act. Bureau lawyers, along with economists from the FTC's Bureau of Economics, investigate market dynamics to determine if the proposed merger will harm consumers.
- Hart-Scott-Rodino Act - Amendments to the Clayton Act
The Hart-Scott-Rodino Act established the federal premerger notification program, which provides the FTC and the Department of Justice with information about large mergers and acquisitions before they occur. The parties to certain proposed transactions must submit premerger notification to the FTC and DOJ. Premerger notification involves completing an HSR Form, also called a “Notification and Report Form for Certain Mergers and Acquisitions,” with information about each company’s business. T
- Maps of the World - Finance - Types of Mergers And Acquisitions
The terms mergers and acquisitions may often be confused and look similar. However, the two have different meanings. Mergers may be of various types and so can acquisitions be. There are few terms like "spin out", "demerger" and "spin off", which are used to denote the process by which a company separates into two different companies. The nascent company is usually a listed company on the stock exchange. The term "Mergers And Acquisitions" is an expression of a strategy pertaining to the corporate sector.
- Mergers and Acquisition - Definition
The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.
- Mergers and Acquisition - Overview
A merger or acquisition is a combination of two companies where one corporation is completely absorbed by another corporation. The less important company loses its identity and becomes part of the more important corporation, which retains its identity. A merger extinguishes the merged corporation, and the surviving corporation assumes all the rights, privileges, and liabilities of the merged corporation. A merger is not the same as a consolidation, in which two corporations lose their separate identities and unite to form a completely new corporation.
- QFinance - Mergers and Aquisitions Regulations - A Global Overview
Mergers and acquisitions (M&A) has become a mundane expression, used daily in the media. In order to operate successfully in a global economy, corporations have become transnational and have to perform at a multinational level. To achieve such expansion, corporations acquire other companies or merge with them. These large corporations are publicly owned, listed on stock exchanges or alternative markets around the world, and engage in M&A activities that are thoroughly regulated by governments to protect the shareholders of target companies.
Organizations Related to Mergers and Acquisition Law
- IBA - Corporate and Mergers and Acquisitions Law Committee
The committee is responsible for reviewing developments relating to corporate governance, privatisations, joint ventures, as well as the whole range of issues affecting all forms of business organisations from multinationals to listed corporations to private family companies, to partnerships and business trusts. The committee is also following developments for new forms of business organisations such as SAS, LLC and LLP. The committee provides in-depth information and exchange of views on these developments and contributes actively to their implementation through publications and conferences.
- International Mergers and Acquisitions Benchmarking Association
Our mission: To identify "Best in Class" mergers and acquisitions processes, which, when implemented, will lead member companies to exceptional performance.
- Mergers and Acquisitions - The Middle Market
Mergers & Acquisitions is the premier source for breaking M&A news and analysis. Mergers & Acquisitions is the premier source for breaking M&A news and analysis. TheMiddleMarket.com, Mergers & Acquisitions' online home, delivers complete daily coverage of pending and ongoing deals as well as insights into industry trends, strategies and the firms and players involved. Plus, the People Database offers key information on the movers and shakers in finance, including work history and contact info, giving you easy access to the players you need to know.' online home, delivers complete daily coverage of pending and ongoing deals as well as insights into industry trends, strategies and the firms and players involved. Plus, the People Database offers key information on the movers and shakers in finance, including work history and contact info, giving you easy access to the players you need to know.
Publications Related to Mergers and Acquisition Law
- BNet - Developments in United States Mergers and Acquisitions Law
This paper briefly reviews the current state of the mergers and acquisitions market in the United States, two recent Delaware court decisions of interest in the area of contests for corporate control, a recent decision by the United States Court of Appeals for the Third Circuit addressing disclaimers in acquisition agreements, and two developments in the tax area that should be of interest to lawyers handling acquisition transactions in the United States, and also offers a comment on the impact of the Sarbanes- Oxley Act of 2002 on mergers and acquisitions transactions.
- Global Finance - Merger and Acquisition News
Global Finance is a monthly magazine founded in 1987 by publishing entrepreneurs Joseph Giarraputo and Carl Burgen. Giarraputo continues as Publisher and Editorial Director. Its mission is to help corporate leaders, bankers and investors chart the course of global business and finance.
- Investopedia - Mergers and Acquisitions
Mergers and acquisitions (M&A) and corporate restructuring are a big part of the corporate finance world. Every day, Wall Street investment bankers arrange M&A transactions, which bring separate companies together to form larger ones. When they're not creating big companies from smaller ones, corporate finance deals do the reverse and break up companies through spinoffs, carve-outs or tracking stocks.
Articles on HG.org Related to Mergers and Acquisition Law
- The Requirements of an HSR Antitrust Filing for a Merger or Acquisition in the United StatesIn the United States, mergers and acquisitions involving companies of a certain size must be reviewed by one of the competition authorities—the Federal Trade Commission or the Department of Justice.
- Legal Considerations in Mergers and AcquisitionsThere are various legal considerations when deciding to merge a company or when an acquisition is possible for buying out another business. These usually involve an asset or equity acquisition or any loans, liens and similar concerns, but some may include stock, interests, shares, employees and conditions that must be met before a merger or acquisition is possible.
- Avoiding Unwanted Liabilities when Purchasing a BusinessIt is possible to prevent the acquisition of liabilities when buying a business from someone else, but this may only be possible through certain types of purchases. There are generally only two manners to buy a company, asset and equity purchases.
- Conditions and Covenants to Include in a Business Acquisition AgreementThere are certain conditions that should be included when acquiring a new business. These agreements often necessitate covenants or promises that must be applied and provided when buying out or becoming the owner of another company. These may be needed at the behest of the previous owner, or they may be required as his or her conditional sell of the organization.
- Differences in Asset Sales or Equity Sales when Selling a BusinessSelling a business is complicated, and determining which type of sales to consider may increase the difficulty on the owner. There are documents to draft, sign and file and there are various persons that must be communicated with and contacted for various reasons.
- Legally Splitting up Business OwnersSplitting up a business when there are multiple owners is often both difficult and complicated for each individual as well as collectively. This affects the assets, liabilities, individual debts, joint debts, employees and operations. When there are no contractual terms that specify what to do, this very act could cause either the complete stop of daily transactions or the ruin of the company.
- When Large Medical Groups Acquire Small Physician Practices – Legal and Economic StructureA trend in the medical marketplace is for big group multi-specialty medical practices to buy up small practices, and integrate them into the big group as satellite offices and cost centers.
- Conducting Due Diligence for a Merger or AcquisitionMergers and acquisitions are very important for corporations when conducting business. To ensure that due diligence is accomplished, a lawyer is usually both necessary and vital in ensuring that paperwork, documentation, contracts and numerous other affairs are in order and properly filed.
- Legal Steps to Closing a Business and How a Business Lawyer Can HelpClosing a business is hard work, and the processes are often difficult for the owners or managers. Many steps are often necessary with various persons that need to be contacted.
- Pre-Sale Due Diligence as a Part of Normal Business OperationsOwners of small and mid-sized businesses can spend nearly all of their time running their business, and leave little time to plan the strategy for continued growth and transition to a sale or other exit. Owners hope for a healthy selling climate when the times comes – whether when they retire, cash out and slow down, or sell and find a new venture. Yet, lack of preparation for transition to exit can have a negative impact on achieving a high sales price and successful exit.
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