INTRODUCTION

Mergers & Acquisitions (“M&A”) lawyers play an important role in guiding a company and its management in an acquisition, sale, merger or restructuring exercise. The lawyer will likely be involved in the drafting, negotiation and signing of contracts for transactions involving the purchase and sale of shares and/or business assets. A purchaser company may be motivated by a desire to enter into an M&A so as to aggressively grow its existing business or expand and diversify into a new line of business. On the other hand, a seller company may be motivated by a desire to enter into an M&A so as to reallocate capital. It could also be under selling pressure arising from financial difficulties. An M&A lawyer can expect to work for a diverse range of companies across industries and geographical locations, advising      a diverse range of clients that includes multinational corporations, start-ups, private equity funds, sovereign wealth funds, family offices and individual investors. M&A deals also come in all shapes and sizes, from a simple deal where the parties and the target company are all within the same country, to a complex cross-border deal involving international parties.

SUB-AREAS

• Private M&A involves a company that is privately owned and whose shares are not publicly traded on any stock exchange. This is in contrast to Public M&A which involves a company that is listed on the stock exchange. A Public M&A deal will typically be more heavily regulated. In Singapore, such a deal may be subject to The Singapore Code on Take-overs and Mergers, the Listing Manual of the Singapore Exchange Securities Trading Limited and the Securities and Futures Act. For Private M&A, the process is usually less regulated and parties have more flexibility in the timeline of the deal as well as the negotiations of the terms and conditions of the sale and purchase.
• While a Share Sale is more common, parties sometimes prefer an Asset Sale as it gives more control over what is included in the purchase/sale. A purchaser may opt for an Asset Sale where it is only keen on acquiring certain (and not all) assets of the seller and does not want to take on previous liabilities (which will remain with the selling entity). However, not taking over a company lock, stock and barrel also presents logistical difficulties to a purchaser, such as having to handle the transfer of title in certain assets, the transfer of employees and novation of contracts.
• A sale can also take place within a Corporate Restructuring & Reorganization exercise, where a company decides to dispose of certain business units or assets. This is often driven by financial difficulties and explains why restructuring lawyers are busiest during a recession. Nonetheless, restructuring exercises may also be due to strategic decisions to reallocate capital and resources towards more profitable or promising business lines.
• It is also common for M&A lawyers to advise on Private Equity or Venture Capital work. While there is no universal definition separating these deals, generally it can be said that a traditional M&A deal involves a company acquiring a target in the same or a complementary industry that has some accretive value to its business, This is in contrast to Private Equity or Venture Capital      where the dominant focus is to make a financial return on its investment when the company is eventually sold or listed. Venture capital involves investments in early-stage start-ups that are believed to have high growth potential, whereas private equity typically refers to investments in more matured companies, where some level of control is obtained to make strategic changes to streamline operations and increase revenues to position the company for a future exit.

WHAT YOU CAN EXPECT

• On Cross-Border deals, you may be acting as Lead Counsel coordinating local counsels across multiple jurisdictions and holding the pen on the transaction documents, or acting as Local Counsel and receiving instructions from the Lead Counsel. 
• Signing of a Confidentiality Agreement or a Non-Disclosure Agreement at the start of the discussion to ensure that information passed from one party to the other will remain confidential.
• Preparing a Term Sheet or Memorandum of Understanding setting out the initial high-level terms for the deal, which may also specify an exclusivity period where the seller is prohibited from      holding further discussions with other parties.
• Carrying out Due Diligence to identify potential risks and liabilities. The seller will often set up a dataroom, where the purchaser’s lawyer will access and review documents to ascertain ownership of assets (such as real property, equipment and intellectual property), proper issuance of shares, potential liabilities and encumbrances, third-party consents required for the deal, terms of material contracts and also separately run public searches for litigation or winding up claims brought against the company. The findings will then be consolidated into a Due Diligence Report and the purchaser can then address identified risks by adjusting the transaction structure/price or safeguarding itself through appropriate clauses in the legal agreements. At the same time, other professional advisors will be conducting financial and tax due diligence.
• Negotiating a Sale and Purchase Agreement, which sets out all the details, terms and conditions of the sale. Certain key sections include the (i) purchase price and structure (especially where there are deferred or variable components), (ii) conditions precedent, (iii) representations and warranties (especially where there are disclosures against it, or qualifications based on materiality or the seller’s knowledge), (iv) indemnities (especially where the purchaser seeks to apply this widely and not only to specific known breaches) and (v) limitation of liabilities.
• To fulfil the conditions precedent or completion, assist with preparing necessary internal authorizations and approvals such as (i) directors’ and shareholders’ resolutions and (ii) pre-emption waivers from existing shareholders. Where needed, advise and assist with obtaining necessary external approvals and consents such as (i) consents from major customers, business partners and lenders who have Change of Control clauses in their contracts, (ii) Governmental and Regulatory Approvals (including licensing authorities, competition commission, or the stock exchange in the case of a public M&A deal). For large transactions, a completion checklist and signing matrix is often prepared to ensure all documents are duly signed and witnessed and all completion deliverables are exchanged. Post-completion, the new shareholders and directors will need to be updated and registered in both public and private records.
• Post-completion, the target company will finally be owned and managed by multiple shareholders. A Joint Venture Agreement or Shareholders Agreement will be entered into to govern the relationship between the shareholders. Some key sections include the (i) voting, income and liquidation rights of shareholders (especially where there are different classes of shares), (ii) list of reserved matters, (iii) resolution of a deadlock scenario, (iv) restrictions on transfer of shares (by way of a moratorium, pre-emption, drag-along, tag-along etc) and (v) the consequence of a default by a shareholder.
• Beyond familiarity with certain statutes such as the Companies Act and Employment Act, an M&A lawyer should also be meticulous in looking out for details, and possess good organizational and communication skills. This is because the role often involves acting as a transaction coordinator and pulling in other departments as and when necessary given that an M&A deal may involve (i) employment, environmental, intellectual property, real estate issues, (ii) tax liabilities or structuring of the transaction in a tax-optimized manner, (iii) the use of leverage/financing to facilitate the acquisition, and (iv) filing and clearance with the competition commission/authorities etc.