The M&A process described is from foreign Buy-side point of view when buying business in Russia: from the perspective of the buying company, whose concern is to look for target companies that are healthy both financially and management-wise. Here is the general overview:
- Forming the M&A Team
Strategizing and setting out your goals are important in the whole merger or acquisition process, since this will affect the other steps along the way.
It is important to form your own M&A team who will devote their time only for this project. People to include in this team are your:
M&A lawyer, Accountant, HR representative, Senior manager (we’ll help with a local counterpart)
- Negotiations and Initial Agreements
After forming your team and finalizing your strategy, we can help look for target companies and with initial negotiations.
A Letter of Intent (LOI) is usually agreed upon by both parties following the initial negotiations. An LOI is a non-binding legal document which outlines the general terms and conditions and will serve as the summary of the proposed deal. It may also include provisions on confidentiality, expense allocations, and due date when to come up to the table again to finalize the deal.
This is where your lawyer’s role is important. Your M&A team may be led by your M&A lawyer, who will represent you in negotiating with potential sell-side companies. We can act as your consultant with our qualified local partner.
Your M&A lawyer can also draft your proposed LOI or countercheck the LOI that you’ll receive from the other party. We’ll help with professional translation.
- Conduct of Due Diligence
An important aspect of the merger and acquisition process is conducting due diligence. The due date indicated in the LOI is typically the due diligence period. After this period, parties may start finalizing their M&A deal.
4. Approval from Federal Antimonopoly Service (if applicable)
In most cases this is not applicable, as this regulation is based on the public interest involved in M&As which is most likely won’t be necessary in your case.
5. Final Contract and Integration
Share Purchase Agreement or Asset Purchase Agreement is now carried out. Your M&A lawyer can again be tasked to draft and finalize the Agreement or review the Agreement drafted by the other party.
The integration process commences once M&A deal is finalized and the operations of the newly formed company run smoothly. It will ‘merge’ the culture of the two previously distinct companies, their workers, and organizational structure.
Early in the process, such as during negotiations, a transition plan must be agreed by the parties that will come in handy during integration. While it may not be set in stone, it will guide the implementors, especially the employees affected, on what to expect and what to do during this stage.