I am planning a small and medium-sized enterprise M&A. Could you tell me what I should be careful of?

We understand that you are considering a small and medium-sized enterprise M&A.

First, M&A refers to one company acquiring or merging with another company, and it is called a merger and acquisition.

In an acquisition, the company does not disappear, and its shares are also maintained as they are.

A merger, on the other hand, has the characteristic that the company disappears, its shares also cease to exist, and they are exchanged for shares of the acquiring company at a fixed exchange ratio.

You can prevent future disputes only if you proceed with a good understanding of these characteristics from the outset.

It appears that you are currently seeking to proceed with an M&A with another small or medium-sized enterprise, and through this it seems possible to supplement personnel and technology and to secure competitiveness.

You also asked about the points to be careful of when proceeding with a small and medium-sized enterprise M&A.

First, you must properly conduct a corporate valuation.

This is because, if you do not identify the accurate value of the company, you may pay an excessive price or offer too low a price.

In addition, a legal review is essential.

You must review contracts, intellectual property rights, liabilities, and other matters, and check the legal risks in advance.

Finally, financial due diligence must also be conducted without fail.

This is because, if you do not properly identify liabilities or cash flow, unexpected financial burdens may arise later.

Beyond these, there are many matters to be careful of, such as the need to examine key personnel and business strategy.

Therefore, if you plan to proceed with a small and medium-sized enterprise M&A, we hope that you will achieve a successful merger and acquisition with the help of an M&A attorney and legal experts.