Find Lawyers in Milan, Italy for Mergers and Acquisitions Law
Practice Area Overview
1. DEFINITION OF M&A
When we talk about “Mergers and Acquisitions” (hereinafter, M&A), it is very difficult to give a definition that is able to include and identify all activities involved in the process aimed at carrying out an acquisition. An M&A transaction requires the participation of different professionals and involves different matters. Generally, M&A refers to all legal, economic, tax, and strategic activities performed to run a merger or similar transaction. Professionals require a wealth of knowledge and experience that allows them to define the structure of the acquisition process and to understand and detect economic consequences and the most relevant risk profiles.
2. THE PURPOSE
M&A transactions allow the growth and
reorganization of a company, without starting a new business. Usually, a buyer
would acquire a target company because the future cash flows of the combined
business, discounted risks, would ultimately net the buyer’s existing
shareholders more money. In particular, the real reasons pushing a company to
carry out a merger or an acquisition can be different and – among others – the
a. taking advantages of economies of scale, i.e. with the acquisition the buyer can have lower average manufacturing costs or by elimination of redundancies in the organization;
b. increasing the number of clients and suppliers;
c. diversifying the main business into different areas to change is risk profile;
d. carrying out a defensive acquisitions to face a severe downturn in its business;
e. obtaining a new and better management;
f. acquiring a control premium.
3. THE FIVE BASIC ACQUISITION STRUCTURES.
Without any intention of completeness and accuracy, according to the interests of the parties at stake, there are many ways to structure an acquisition and, among these, it may be useful to point out:
a. Stock purchase: when the buyer or a subsidiary of the buyer purchase the outstanding stock of the target directly by the shareholders of the target.
b. Merger: when the target is merged, pursuant to the applicable state merger statute, with the buyer or with a subsidiary of the buyer that has formed for the purpose effecting the merger.
c. Asset purchase: when the buyer or a subsidiary of the buyer purchase all or defined part of the assets of the target.
d. Joint venture: it is a partnership between two companies with the purpose to start a new business together and enjoy earnings proportionally to the contribution of each one. It is very useful to reduce the cost and to share the business risk with the other partner instead of undertaking a new business alone.
e. Capital increase: it is a very particular, innovative and interesting way to enter into a company from the inside instead of the outside. Substantially, the target deliberates a capital increase limiting the subscription right, provided for the shareholders, in favor to third parties. In this way, there will not be a buyer and a seller, but simply an investor and a target: the first wishes to invest in the target and he invests directly in company itself, and the owner will have a lower stake as consequence of the capital increase entirely subscripted by the investor, who will obtain usually the controlling stake.
4. THE ACQUISITION PROCESS.
The acquisition process is divided into different steps, each one strictly linked and dependent on the overcoming of the previous step:
a. Confidentiality agreement: it is the first document signed by the parties and it defines confidential information very broadly and obligates the buyer to keep information in strict confidence.
b. Letter of intent: this letter, usually prepared by counsel of the purchaser, indicates the nature of the contemplated transaction and summarizes its basic terms, including term of payment and the principal conditions of the closing.
c. Term sheet: it is different from the letter of intent, because it defines the basic principles of the future agreement, while letter of intent regards more business matters. Quite often the letter of intent and the term sheet are merged in one document.
d. Due diligence: after signing of the above document, the buyer can obtain and analyze all information about the company.
e. Share and Purchase agreement: it contains all details of the transactions and it is in the form of a preliminary agreement to execute the transaction.
f. Closing: it is the last phase of the process in which there will be the effective execution of the deeds and documents provided for under the Share and Purchase agreement and the M&A is effectively implemented.
Select a location from the list below to find the best legal talent for your needs.
Luca Baroni is a salary partner, in the financial center of Milan, focusing on regulatory, corporate and banking law, the financial sector (finance, debt and equity) and funds and assisting Italian and international intermediaries, corporate issuers, funds and asset management companies in the field of extraordinary finance transactions and capital raising. In particular, Luca's practice takes place with particular regard to: regulation relating to undertakings for collective investment (alte...
Diego is partner of the Firm. He has consolidated a relevant experience in the field of international taxation and cross border transactions, in relation to which he assists Corporate and Private clients. In particular, he specializes in M&A and Private Equity, assisting major investment funds operating in Italy. His expertise focuses on the structuring of investments, management and monitoring, as well as divestments (exit). Diego specializes also on debt restructuring as well as corpora...
Angelo is one of the founding partners of the Firm. He graduated in law summa cum laude at the University of Pavia in 1996 and in 1999 obtained a Master of Laws (LL.M.) in International Law at the University of Cambridge (UK). In 2003 he became a PhD in "Human Rights" at the University of Palermo and since 2006 is a researcher in international law at the Faculty of Law of the University of Pavia, where he teaches International Law and European Information Law. Admitted to the Italian Bar as a...
Gregorio is name partner and managing partner of the Firm as well as one of its founders. He is professor of civil law at the Faculty of Law of the University of Milan and, in view of his academic role, has often received assignments as an independent lawyer, for advice and legal opinions pro veritate by major financial institutions, banks, insurance companies as well as public entities and independent and governmental authorities. Gregorio was involved in several privatization deals and he o...
Professor Piergrossi is the founding partner and the Chairman of Piergrossi Studio Legale. For over fourty years he has successfully represented domestic as well as international clients in a broad range of contentious and non-contentious matters including Commercial and Corporate Law, M&A, Capital Markets, Insolvency and Restructuring. He is a renowned specialist in Intellectual Property and regularly assists clients in issues pertaining to patents, trademarks, trade names, domain names,...
Paola, a partner of the Firm, is a transactional counsel whose practice mainly focuses on commercial and corporate law, as well as on regulatory issues. She has developed considerable experience in drafting and negotiating a wide range of national and international contracts, from stock acquisitions to joint venture agreements, from license agreements to high- tech services agreements. Paola has also developed significant expertise in the field of compliance and anti-corruption legislation. P...
Recognition by Best Lawyers is based entirely on peer review. Our methodology is designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area.
Best Lawyers employs a sophisticated, conscientious, rational, and transparent survey process designed to elicit meaningful and substantive evaluations of the quality of legal services. Our belief has always been that the quality of a peer review survey is directly related to the quality of the voters.
Enhancing Consumer Safety Through Winning Jury Trials and Substantial Settlements
by Justin Smulison