The term “Mergers and Acquisitions”, as it is commonly used, refers to two separate concepts. A “merger” (or amalgamation as it is known in Canada), which is the less common of the two concepts, refers to a process by which two or more companies merge together to create a single entity. The way in which this is achieved, and the resulting structure of the new company can take many forms and will depend on the needs and goals of the parties involved.
An acquisition on the other hand is a much more common transaction and generally refers to the sale or purchase of a business. This can occur through any number of different structures and methods, with the most common being the share purchase transaction and the asset purchase transaction. Each comes with its own set of benefits and drawbacks, and the best structure for a given situation will depend on the given circumstances and the needs and objectives of the parties involved. For example, if a target company has a number of substantial liabilities, structuring the transaction as an asset purchase will often be the preferable approach.
Our business lawyers have acted on both the buy-side and the sell-side of a vast number of transactions, across many industries including IT, transport, mining and financial services, to name but a few.