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Merger and acquisition lawyers, who are they?

luật sư mua bán sáp nhập - Phuoc & Partners

Merger and acquisition lawyers, who are they?

A lawyer practicing in a specific legal area often has his job title attached, by friendly colleagues and clients, with the name of the legal area they work in. Think criminal lawyers, civil lawyers, intellectual property lawyers, labour lawyers etc. Some lawyers are also named according to the transaction type that they are often involved in, such as merger & acquisition (M&A) lawyers. Some Vietnamese are not used to reading the sign “&” and English letters so they say MA lawyers. Actually only businessmen who are familiar or carry out M&A transactions realize the “key” or “bridging” role that M&A lawyers play in these transactions, who at times work extreme hours to get an M&A transaction initiated and over the line for their clients.

Interpreters

In the first stage of an M&A transaction, the parties must conduct meetings to exchange preliminary documents such as a letter of intent, term sheets and the memorandum of understanding (MOU) which drafts the content of the entire M&A transaction. M&A lawyers will first act for the seller in communicating messages through these documents, and on the other side, the buyer will require their M&A lawyers to interpret these messages – whilst on appearances they are merely sheets of paper, they represent the transition of assets of extremely high value and impact a great number of people in the future.

Private Equity and Merger & Acquisition

Private Equity and Merger & Acquisition – Phuoc & Partners

In terms of commercial practice, most information exchanged at this stage is not legally binding on the parties, which means sellers do not necessarily have to sell their assets or businesses to buyers and on the other side, buyers do not necessarily have to spend money buying the same from sellers. However, there are actually more than a few cases where disputes arise from these initial messages in M&A transactions. Therefore, the parties need an interpreter who can ensure their messages are delivered fully and exactly.

Trust enhancer

In some cases, M&A lawyers also play the role of a trust enhancer for the buyer or the seller. In recent years, foreign enterprises have often conducted transactions to acquire the whole or part of Vietnamese enterprises, and they usually require the seller to retain a lawyer specializing in M&A. Then, the M&A lawyer will truthfully and accurately prepare legal documents due diligence reports or disclosure letters to clarify all issues of an enterprise. To protect his prestige and professional ethics, the lawyer will absolutely give out the information which is collected from true legal documents and under a lawful and objective procedure no matter which party he is working for.

It is important to build trust in each other and trust is what decides the success of a transaction. With the participation of an M&A lawyer, the buyer can trust that the goods (enterprises or assets) that he will buy are lawful assets; the seller can trust that the buyer has the full legal capacity to conduct this transaction. There are some transactions where the buyer demands the right to designate the M&A lawyer for the seller in such transactions, and this is the precondition for further negotiations between the parties. It is their professional ethics that help a lawyer become the trust enhancer for parties in transactions for which he provides legal services.

Designer

Most M&A transactions require the participation of several parties (the buyer, the seller, companies related to the seller and the buyer in many countries, credit institutions financing the transaction etc.) and often go through several stages that are relatively complicated. Often, in the first meeting with the client, M&A lawyers are asked to advise on the structure of the transaction to ensure its commercial purposes, as well as the shortest time and lowest costs for conducting the transaction (mostly the matter of tax saving).

Private Equity and Merger & Acquisition - Phuoc & Partners

Private Equity and Merger & Acquisition – Phuoc & Partners

This requires M&A lawyers to be fast thinking and knowledgeable, to have good business and legal acumen in order to provide a simple and easily understandable analysis of the pros and cons for the parties’ consideration and decision making process. The role of an M&A lawyer in this step is extremely important because he outlines the way, or in other words the lawful order, that the parties will follow and which ensures legal and financial safety. Based on tax and financial regulations, M&A lawyers can help parties reduce tax expenses for the transaction.

Legal writer

It is none other than M&A lawyers who will transform the parties trade agreements into legally binding provisions to express their commitments, as well as specify their rights and obligations in the transaction. The drafted documents often include shareholder agreements, subscription agreements, sale and purchase agreements, memorandums and articles of association, non-disclosure agreements, deeds of non-competition and others agreed by the parties.

Legal writers need to be capable of transforming designed matters into clear, adequate, inclusive and well-projected terms. This requires M&A lawyers to gain high qualifications, experience and technical expertise to support the transaction.

Private Equity and Merger & Acquisition - Phuoc & Partners

Private Equity and Merger & Acquisition – Phuoc & Partners

Tactful expediter

During M&A transactions, the parties cannot avoid arising problems due to no common voice found on payment, handover, risk, personnel, etc. There are times when parties go into different directions, and do not accept each other’s proposals because of too many pre-conditions. There is even a case where either party may declare a cancellation of the transaction against the other party’s claims. At that point, M&A lawyers of the parties must discuss together to find solutions to help the parties “come back to the table” and continue to negotiate. In addition, M&A lawyers are also messengers in a game where the interests of the parties are often opposing. Whilst some lawyers tend to be so tough that advise their clients to break deals when a conflict arises, a good M&A lawyer can act as a messenger of the M&A transaction and know how to keep the matters going until the transaction is completed.

For an M&A transaction to be successful, M&A lawyers play a very important role. From time to time, they must hold different roles and fulfil these roles. Thus, to assist the parties in making successful M&A transactions, don’t look anywhere else but to an experienced and reputable M&A lawyer.

Our Mergers and Acquisitions capability is focused on several sectors including automotive, real estatepharmaceutical/healthcareinfrastructureconsumer productsmedia, and communications. Our M&A teams work closely across our network of offices to provide clients with an unrivalled service anywhere in Vietnam.

If you would like further information on how our firm can assist in addressing your Mergers and Acquisitions issues, please feel free to Contact Us.