What are the main contents of company merger and acquisition?

Matters needing attention in company acquisition M&A is a fast and effective way for enterprises to grow and develop, and company reorganization is very important. Some companies with good performance can take the opportunity of M&A to rapidly expand their production and business activities ... Before acquiring companies, from a legal perspective, there are some things that need to be prepared for reference. 1. In the early stage, the acquirer will negotiate with the target company or its shareholders to get a preliminary understanding of the situation, and then reach an acquisition intention and sign an acquisition letter of intent. In order to ensure the security of M&A transactions, the acquirer will generally entrust lawyers, accountants, appraisers and other professionals to form a project team to conduct due diligence on the target company; In order to promote the success of M&A project, the target company generally needs to provide necessary information to the acquirer, and disclose the company's assets, operation, finance, creditor's rights and debts, organizational structure, labor and personnel, etc. If you encounter malicious M&A or the information disclosed by the target company is untrue, it will cause greater legal risks to the other party. Therefore, in the preparatory stage of M&A, we suggest that M&A and M&A sign an exclusive negotiation agreement to preliminarily stipulate M&A's intention, payment guarantee, trade secrets, disclosure obligations and liability for breach of contract (the acquirer is a listed company, so we should pay special attention to the other party's confidentiality and information disclosure support obligations), so as to avoid the arbitrariness of the M&A process and protect the interests of both parties in case of the breakdown of negotiations in the early stage of M&A. Due diligence (I) Scope of legal due diligence The acquirer, with the assistance of the target company, cleans up the assets, creditor's rights and debts of the target company, conducts asset evaluation, conducts detailed investigation on the management structure of the target company, and records employees. In the due diligence stage, lawyers can make legal evaluation of the materials provided by the target company or the information obtained through legal investigation, and verify the relevant information obtained in the preparation stage, so as to make full information preparation for the acquirer to make the acquisition decision. The investigation and verification of the basic situation of the target company mainly involves the following contents (the specific contents of the investigation can be appropriately increased or decreased according to the actual situation of the M&A project under the premise of complying with laws and regulations): 1, and the business scope of the target company and its subsidiaries. 2. Relevant documents on the establishment and change of the target company and its subsidiaries, including industrial and commercial registration materials and approval documents of relevant competent departments. 3. Articles of association of the target company and its subsidiaries. 4. The register of shareholders and shareholding of the target company and its subsidiaries. 5. Resolutions of previous board meetings and shareholders' meetings of the target company and its subsidiaries. 6. Identification certificates of the legal representatives of the target company and its subsidiaries. 7. Rules and regulations of the target company and its subsidiaries. 8. The target company and its subsidiaries sign acquisition contracts with others. 9. Whether there are restrictions on the transfer of the acquisition target, such as the establishment of guarantee, litigation preservation, etc. 10. Investigation on the relevant attached documents of the target company: (2) According to different acquisition types, the matters needing attention with different emphases are not independent of each other. Therefore, in the acquisition, we should comprehensively consider all aspects of attention. 1. If part of the equity of the target enterprise is acquired, the acquirer should pay special attention to excluding the preemptive right of other shareholders of the target enterprise after performing legal procedures. According to Article 72 of the Company Law: "When a shareholder of a limited liability company transfers its shares to a person other than a shareholder, it shall obtain the consent of more than half of the other shareholders." Under the same conditions, other shareholders have the priority to purchase the shares transferred with the consent of the shareholders of the company. If the target enterprise is a limited company, the purchaser should pay attention to asking the transferor to provide written documents that other shareholders agree to the transferor's transfer of its shares or have fulfilled the statutory notification procedures, and eliminate the shareholders' preemptive right through legal procedures before purchasing. Otherwise, even if the acquirer and the transferor sign the transfer agreement, the transfer agreement may not take effect because of opposition from others. 2. If it is to acquire the controlling interest of the target enterprise, the acquirer should pay special attention to fully understand the property and debt of the target enterprise. If the acquisition object is an enterprise legal person, the creditor's rights and debts of itself and its property will not be transferred due to the change of investors. If the acquisition object is a superficial or even insolvent enterprise, it will face great risks. Before implementing the acquisition, the acquirer should pay attention to the property of the target enterprise, especially the debt. In addition to the existing debts at the time of transfer, we must also pay attention to whether the target enterprise still has contingent liabilities, such as providing external guarantees or possibly taking joint liability in the future. In addition to inquiring and understanding through various channels, the purchaser may also require the transferor to list all debts in the transfer agreement, and require the transferor to bear relevant debts beyond the listed scope. 3. If it is the acquisition of specific assets of the target enterprise, the acquirer should pay special attention to fully understand whether there are rights defects in the specific assets. There are rights defects in specific assets, which may lead to the invalidation of the acquisition agreement, the inability of the acquirer to obtain the ownership of the specific assets, the obstacles to transfer or the failure to achieve the transaction purpose. Therefore, the acquirer needs to pay attention to whether there are rights defects in the specific assets to be acquired. In the case of uncertainty, in order to safeguard its legitimate rights and interests, the transferor may be required to make a commitment in the transfer agreement to ensure that the property has no rights defects. 4. The acquirer should pay attention to setting safeguard clauses for himself in the letter of intent for acquisition. In view of the relatively large amount of manpower, material resources and financial resources invested by the acquirer in the acquisition activities, the acquirer should set safeguard clauses in the acquisition letter of intent, such as exclusion clauses, provision of materials and information clauses, confidentiality clauses, locking clauses and cost sharing clauses, etc., in order to obtain legally binding protection for the acquirer. These clauses mainly prevent the transferor from negotiating with a third party to transfer or sell the equity or assets of the target company without the consent of the acquirer, and exclude the transfer. (3) The matters needing attention in due diligence are analyzed from different angles. The establishment of the company, previous capital increase and equity transfer are all related to the effectiveness and certainty of equity. Therefore, when purchasing equity, we must review the historical evolution of the target company to ensure the legitimacy of the acquisition target. When deciding to buy a company, we should pay attention to the composition of the company's assets, equity allocation, asset guarantee, non-performing assets and so on. First, among all assets, it is necessary to distinguish the specific proportion of current assets and fixed assets. In the capital contribution, how to make clear the proportion of monetary capital contribution to the total capital contribution, and whether the non-monetary assets have gone through the ownership transfer procedures also need to be made clear. Second, it is necessary to clarify the equity allocation of the target company. First of all, we must grasp the shareholding ratio of shareholders and whether there are preferred shares; Secondly, it is necessary to examine whether there are related shareholders. Third, the assets with security restrictions will have an impact on the solvency of the company, so we should examine the secured assets and unsecured assets separately. Fourth, we should focus on the company's non-performing assets, especially the depreciation of fixed assets, amortization of intangible assets and assets that are about to be scrapped and cannot be recovered. At the same time, the company's liabilities and owners' equity are also issues that should be paid attention to when buying a company. In corporate liabilities, we should distinguish between short-term debts and long-term debts, and distinguish between offset debts and non-offset debts. The structure and proportion of assets and liabilities determine the owner's equity of a company. (IV) The main risk of M&A M&A is a complex systematic project, which is not only a capital transaction, but also involves many factors such as legal and policy environment, social background and company culture. Therefore, the risk of M&A also involves all aspects. In terms of risk prediction, M&A risks mainly include the following categories: 1. In the process of M&A's risk declaration, both parties must first determine the M&A price of the target enterprise. Its main basis is the annual report and financial statements of the target enterprise. However, in order to obtain more benefits, the target enterprise may deliberately conceal the loss information and exaggerate the income information. Many information that affects the price is not fully and accurately disclosed, which will directly affect the rationality of the M&A price, thus making the merged enterprise face potential risks. 2. Assessing Risk For M&A, it is necessary to assess the assets and liabilities of the target enterprise and its target because it involves the transfer of all or part of the assets or liabilities of the target enterprise. However, in the evaluation practice, there are problems in the accuracy of the evaluation results and the interference of external factors. 3. Contract Risk The target company may be lax in contract management related to it, or the buyer cannot fully understand the details of the contract concluded between the target company and others due to the subjective reasons of the seller. These contracts will directly affect the risk of the buyer in the merger and acquisition. 4. The object of asset risk enterprise M&A is assets, and the ownership of assets becomes the core of the transaction. In the process of M&A, if we rely too much on the book information of statements and do not make further analysis on the number of assets, whether assets exist according to law and whether assets are effective in the production and operation process, it may lead to a large number of non-performing assets in enterprises after M&A, thus affecting the effective operation of enterprises. 5. Debt risk For M&A, after the completion of M&A, the enterprises after M&A have to bear the original debt of the target enterprise. Due to liabilities and future liabilities, there is a large room for subjective operation, and some future liabilities are not reflected in the company's accounts. Therefore, these debt problems are risks that must be taken seriously in mergers and acquisitions. Mergers and acquisitions of financial risk enterprises are often carried out through leveraged buyouts, which will inevitably lead to higher debt ratio of acquirers. Once the actual effect of enterprise merger and acquisition fails to achieve the expected effect due to market changes, the enterprise itself will fall into financial crisis. 7. Litigation Risk In many cases, it is difficult to predict the outcome of litigation in advance. If the seller fails to fully disclose the ongoing or potential litigation and the personal situation of the litigants, the litigation result is likely to change the asset amount of the target company such as accounts receivable. In terms of possible litigation risks, the acquirer needs to focus on the following aspects: first, whether the target company has legally signed an effective labor contract with its original employees, whether it has paid social insurance for employees in full and on time, and whether it has paid employees' wages on time. Investigate these situations to ensure that the company's purchase will not lead to the problem that former employees will file labor dispute lawsuits in the future; Second, it is clear that there is no dispute between shareholders of the target company in terms of equity transfer and income distribution. Only in this way can the signed purchase agreement be effectively performed, because the correct performance of the M&A Agreement requires the legal and effective support of the Equity Transfer Agreement; Third, ensure that there is no dispute between the target company and its creditors, and even if there is, a proper solution and agreement have been reached. Because after the acquirer acquires the target company, the original creditor's rights and debts of the target company will be inherited by the acquirer. Fourth, it is necessary to investigate whether the target company and its responsible person have committed criminal acts and whether there are criminal proceedings that affect the acquisition intention of the acquirer in a certain sense. 8. One of the purposes of customer risk M&A is to use the original customers of the target company and save the investment of new enterprises in developing the market. Therefore, the scope of the original customers of the target company and the possibility of keeping them will affect the expected profit of the target company. 9. Employee Risk Target Whether the burden of surplus employees in the company is too heavy, the proficiency of on-the-job employees, their ability to accept new technologies and whether employees will leave after the merger are all important factors affecting the expected production technology. 10, Confidentiality Risk Knowing as much as possible about the information of the other party and the target company is a main means to reduce the risk, but it also creates a new risk, that is, the information provided by one party may be abused by the other party, which may make the other party passive in the transaction, or after the transaction fails, the buyer has mastered almost all the information of the target company, such as technical and commercial secrets such as recipe process marketing and China network, which will pose a fatal threat to the target company and the seller. 165438+ 12. Different enterprises have different corporate culture differences. If M&A enterprises can't integrate into the corporate culture of the merged enterprise after completing M&A, and the merged enterprise can't integrate into the corporate culture of the merged enterprise, then the decision of the merged enterprise can't be effectively implemented in the merged enterprise, and the synergy effect and scale operation benefit of enterprise M&A can't be realized. 13, reputation risk The goodwill of an enterprise is also a part of the intangible assets of the enterprise. Whether the target company has the risk of reputation crisis in the market or not, the reputation of relevant financial institutions is an important factor reflecting the profitability of the target company. Merging a company with a bad reputation will often make the acquirer bear a heavier burden. Three. Signing agreements and procedures Representatives of both parties to the acquisition and creditors of the target company form a group to draft and pass the acquisition implementation plan. The creditor and the acquired party reached a debt restructuring agreement, stipulating the debt repayment after the acquisition. The two parties formally negotiate and sign an acquisition contract through negotiation. After the transfer agreement is reached, the purchaser shall handle the relevant change registration as soon as possible. Where the shareholders of a limited company change, they shall register the change with the administrative department for industry and commerce; If the ownership of specific assets such as real estate changes, it is also necessary to register with relevant management departments before obtaining property rights. In the acquisition negotiation, the acquirer should try to stipulate the obligations of the transferor in the process of handling the change registration in the transfer agreement, so as to prevent the transferor from deliberately delaying the formalities or concealing some documents needed for the formalities after receiving the transfer money.