MERGERS & ACQUISITIONS: WHAT YOU NEED TO KNOW
The success of a merger or acquisition depends on a structured and rigorous process.
Whether it’s a vertical integration, a horizontal merger, or a strategic transaction between complementary businesses, each phase is critical. Here are the key steps in an M&A transaction, from the initial strategy to post-closing integration
STEP #1 — STRATEGIC PLANNING AND OBJECTIVE SETTING
Before initiating any action, it is essential to define the economic, legal, and operational goals of the transaction:
- Why pursue this acquisition or merger?
- What synergies are expected?
- What risks need to be anticipated?
This strategic phase provides a framework and helps identify suitable partners or target companies.
STEP #2 — SIGNING A LETTER OF INTENT (LOI)
The letter of intent formalizes the parties’ mutual interest in negotiating, without yet committing to the deal. It outlines:
- the main terms of the transaction (estimated price, scope, etc.);
- the conditions precedent (due diligence, exclusivity, etc.);
- an indicative timeline.
Although non-binding (except for specific clauses), it lays the foundation for serious negotiations.
STEP #3 — LEGAL DUE DILIGENCE
Due diligence is a crucial phase. It consists of a full legal, tax, financial, and HR audit of the target company to identify potential risks.
It generally covers:
- ongoing contracts;
- employment and HR matters;
- pending or potential litigation;
- tax and environmental liabilities.
This analysis may have a direct impact on key elements such as price adjustments and the warranties required by the buyer.
STEP #4 — DRAFTING AND NEGOTIATING AGREEMENTS
Once due diligence is complete, l’avocat M&A the M&A lawyer drafts the final documents, including:
- the share purchase agreement (SPA);
- the shareholders’ agreement, if parties remain associated;
- representations and warranties to cover identified risks.
This is a strategic phase that shapes the legal framework of the deal.
STEP #5 — OBTAINING REGULATORY APPROVALS
Depending on the nature of the transaction, regulatory bodies may need to be consulted. For example:
- notification to the French Competition Authority (if thresholds are met);
- approval from the European Commission for cross-border deals;
- information and consultation of employee representatives.
Failure to comply with these obligations may result in the nullity of the transaction or even penalties.
STEP #6 — CLOSING: THE LEGAL FINALIZATION OF THE M&A DEAL
Le closing est l’acte juridique qui matérialise la conclusion de la transaction. C’est le moment où :
- shares or assets are transferred;
- the purchase price is paid;
- final legal documents are signed.
All parties and their advisors are typically involved in the closing.
STEP #7 — POST-CLOSING INTEGRATION AND MONITORING
After the transaction, the integration phase begins:
- aligning legal and tax structures;
- managing internal and external communications;
- monitoring performance of contractual commitments;
- enforcing non-compete clauses, earn-out provisions, etc.
The M&A lawyer's role does not stop at closing: they continue to support their client through post-deal reorganization and integration efforts.
L’opération de fusion-acquisition est un processus complexe qui nécessite que chaque étape soit préparée avec soin pour sécuriser l’opération et maximiser sa rentabilité.
Vous souhaitez être accompagné dans le cadre d’une telle transaction ? Contactez The Line.
