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Mergers


Our team of specialist Corporate Solicitors provide advice to a broad range of clients including plcs, owner-managed businesses, management teams, private equity investors and serial entrepreneurs on all aspects of mergers and acquisitions (M&A)

We provide practical, commercial and coherent advice and are able to deliver a complete service with support from our Property, Employment, Commercial, Dispute Resolution and Private Client teams.

What is a Merger?

A merger is the coming together of two or more enterprises for the mutual sharing of the risks and rewards of the combined enterprise.


The Structure of a Merger

A merger may be structured in a variety of ways, but typically:

  • Under a merger by transfer of shares, the shareholders of two or more companies transfer their shares to a new holding company formed for the purpose, in consideration for the issue of shares in the new holding company (see Acquisitions and disposal of shares); or
  • Under a merger by transfer of assets, two or more companies transfer their respective undertakings and assets to one of their number or to a new company formed for the purpose, in consideration of the issue of shares to the transferor company(ies) (see Acquisitions and disposal of assets).

The Key Features of a Merger

A key feature of a merger transaction will be the basis upon which the shareholders work together and manage the combined business moving forward. These arrangements will be documented in a shareholders’ agreement and new articles of association for the new venture. Such arrangements will vary considerably from case to case, but some of the more important areas to be considered are as follows:

  • The object and scope of the venture;
  • The capitalisation and financing of the company;
  • The composition of the board and management arrangements;
  • Provisions for distribution of profits;
  • Transferability of shares in different circumstances;
  • How intellectual property is to be owned and exploited;
  • Provisions for protecting the minority (if any);
  • Provisions for resolving a deadlock in relation to decision-making;
  • Provisions relating to the exit of shareholders; and
  • Restrictive covenants on the company and the shareholders.

Prior to a merger, the participating companies are usually either carrying on the same kind of business in competition with one another or are engaged in businesses which are complementary (such as manufacturing and marketing the same range of products).

After the merger, any competition between the merging companies ceases. Consequently, a merger may raise complications regarding competition law, although in some cases the effect of the merger may not be significant because the participating businesses possess only a small share of the relevant market.


Examples of our work and the transactions we have recently advised on include:

  • Advising on a large Cheshire based veterinary group providing services to equine, farm and small animals on two mergers with other local veterinary partnerships.
  • Acting on the merger of two specialist suppliers and installers of access control systems. Our work included preparing and negotiating heads of terms, the merger agreement and a hive up of business assets as well as a shareholders’ agreement and new articles of association for the merged business.
  • Acting for Baqus Group plc on the merger of three Quantity Surveying practices immediately prior to its flotation on AIM.

Contact our Corporate Company Solicitors

If you would like to speak to an experienced solicitor about a potential merger or if you have any questions, please contact our specialist Corporate / Company team on 0161 941 4000 or email lawyers@myerson.co.uk and we will be happy to assist and guide you.

 

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Myerson Solicitors LLP
Grosvenor House, 20 Barrington Road, Altrincham, Cheshire, WA14 1HB

Tel: +44 (0)161 941 4000

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