Corporate Acquisition

▶ Strengthening market power and realizing economies of scale

▶ Securing new technology and skilled talent

▶ Business diversification and entry into new markets

▶ Improving management efficiency and reducing costs

An acquisition is a method by which one company obtains the shares of another company and thereby secures management control, and in this case the company that is acquired continues to exist legally as it was.

By contrast, a merger is a form in which two companies are integrated into one, where typically one company survives and the other ceases to exist.

In addition, an acquisition and a merger also differ in how the shares held by the company's shareholders are treated.

In an acquisition, the shares of existing shareholders are maintained, but when a merger takes place, the shares of the company that ceases to exist disappear and changes occur, such as their conversion into shares of the surviving company.

An asset acquisition refers to a method of individually transferring all or part of a company's property.

Unlike a transfer of business, this is carried out with the transferor and the transferee negotiating individually over each asset and liability item.

A transfer of business treats the entire organization as a single entity and is a form in which the business property is transferred as a whole and comprehensively.

It often involves transferring part of a company's business divisions, and it includes not only simple property or rights but also all elements necessary for the business, such as trade secrets, know-how, employees, the technical staff, sales networks, and clients.

A share acquisition is a method of securing management control by purchasing the shares of another company.

Because it is carried out through transactions among shareholders, the procedure is relatively simple, and it is the most commonly used M&A method.

In the early stage of a corporate acquisition, a dedicated task force for promoting the acquisition is formed within the company.

At the same time, specialized advisory institutions, such as accounting firms and law firms, are selected, and a preliminary valuation of the target company is carried out.

In addition, a preliminary review of the funding plan for the acquisition and of the due diligence strategy is conducted.

After concluding a memorandum of understanding (MOU) with the target company, the full due diligence process begins.

Due diligence is carried out with a focus on key areas, such as finance, accounting, and legal matters, and the results are compiled into a due diligence report for internal reporting.

The valuation is then finalized, and the analysis of the synergy effects from the acquisition is organized together with it.

Based on this information, the final acquisition proposal is prepared and goes through the internal reporting process.

The prepared acquisition proposal is submitted to the target company, and where necessary, exclusive priority negotiation rights may be secured.

Negotiations then proceed not only on price but also on various non-price terms of the contract, and the results of the negotiations are finalized after internal reporting.

From this stage onward, the development of the post-acquisition operating plan also begins.

After a board resolution is passed for the execution of the contract, the contract between the two parties is formally concluded.

The payment is then made, and the process moves to the actual implementation stage in accordance with the previously established post-acquisition plan.

In a corporate acquisition, legal review must be conducted closely, from the process of selecting the target company through the preliminary investigation stage to the review of the contract.

It is also important to reflect the feedback of a merger and acquisition attorney throughout the overall corporate acquisition process and to revise or amend the contract terms.

Our firm includes many attorneys experienced in this area with an average of more than 10 years of experience.

Through collaboration with experts in each field, such as accountants, tax accountants, and patent attorneys, precise analysis of the target company and strategic planning are possible.

If you are facing difficulties with a corporate acquisition, please feel free to request the assistance of a merger and acquisition attorney at Daeryun Law Firm at any time.