Introduction to Mergers and Acquisitions: Process, Deal Structures, Acquisition Agreements

M&As occur when two or more companies combine in some form. Although the terms "merger" and "acquisition" are used interchangeably, they have different legal meanings. In broad terms, a merger occurs when two companies combine to form a single entity, whereas in an acquisition one company acquires another company and absorbs the company's business.

While there are several M&A deal structures, two of the most common are a stock or equity purchase and an asset purchase. In a stock or equity purchase, the buyer purchases the ownership equities of a target company from the target company's owners and thereby acquires the target company's assets and liabilities. The consideration is paid to the target company's owners, not the target company itself. In an asset purchase, the buyer purchases the assets of the target company from the target company and pays the target company directly. The determination of an optimal M&A transaction structure is a complex process driven by a number of considerations, along with balancing the advantages and disadvantages of each.

The acquisition agreement defines the parties' intentions with regard to the purchase and sale of the business. It is important to understand the key terms of a standard acquisition agreement and how the terms interact with one another. Also, there are key differences between an asset purchase agreement and a stock purchase agreement.

Listen as our authoritative speakers, who have extensive experience representing buyers and sellers in a variety of industries, take you through the M&A process from beginning to end, provide the ins and outs on deal structures and acquisition agreements, and examine common pitfalls to avoid.