Due Diligence is a process of comprehensive assessment of business operations, assets, finance, goodwill, etc. of the target company before the parties officially carry out the M&A transaction. One of the indispensable types of due diligence process is legal due diligence. The below article by Apolo Lawyers (Tel: (+84) 903.419.479) will provide Clients the information about this topic.
Legal due diligence is a factor that largely determines whether the deal would go through or not. So what does legal due diligence mean?
Legal Due Diligence (LDD) in M&A transaction is Legal due diligence in M&A is the process by which the lawyer of the acquirer collects, researches, researches, reviews and evaluates information about the target company to identify potential legal issues that will affect the acquisition of the company and to provide appropriate advice.
The lawyer of the acquirer will draft and send to the seller the information request list, which outlines the types of information and documents that the seller needs to allow the acquirer to access in order to conduct the review.
The content of the initial request for information and documentation is subject to the scope of legal review.
In the initial stage, the acquirer does not have much knowledge about the target company, so the request for information and documents is often very broad to cover all cases.
The lawyer of the acquirer can search for more information about the target company through the press, the Internet and government databases such as the National Business Registration Portal,…
With the information and documents provided by the seller, the lawyer of the acquirer conducts research, review, investigation, assessment of the target company and points out legal issues that are likely to affect the transaction. expected translation.
Usually the lawyer will research the target company on important aspects, from the establishment and management of the company, necessary permits, legal compliance, existing assets, loans, important business contracts, workers, Intellectual property rights, lawsuits in which the company participates,…
Determining the scope depends on key factors such as the needs of the acquirer, transaction structure, and the line of target company line of business.
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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.
>>>Read more: Mergers and Acquisitions: What is the difference?
>>>Read more: Why is legal due diligence important?
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