Corporate attorney, are you available? Could you tell me about M&A process methods?

Hello. I am a corporate attorney at Daeryun Law Firm (LLC). You inquired about M&A.

M&A process methods can be largely divided into three: open competitive bidding, restricted competitive bidding, and individual negotiation.

First, open competitive bidding is a method of publicly announcing the sale, where anyone interested in acquisition can participate and proceed with negotiations.

There is the advantage of being able to select buyers from various acquisition candidates and to maximize the sale price through competition.

However, it has the disadvantage that the transaction procedure is complex, making rapid progress difficult, and since the company's sale is publicly known, it can negatively affect business operations.

Next is restricted competitive bidding.

This involves receiving letters of intent from a small number of interested candidates and proceeding with negotiations.

It has the advantage of being able to proceed with negotiations quickly through an efficient sale process.

However, since negotiations occur with a small number of acquisition candidates, it has the disadvantage of being disadvantageous in creating a competitive structure compared to open competitive bidding.

Lastly, individual negotiation. This is a method of negotiating 1:1 with the acquisition intender.

Since there is no negotiation process through competition, rapid and efficient sale is possible, and maintaining confidentiality is easy.

However, since it is a negotiation without competitors, it has the disadvantage of possibly having difficulty in negotiations.

These M&A process methods each have their advantages and disadvantages, and it is good to determine and decide according to the company's situation.

To defend against legal risks, we recommend preparing with the help of a corporate attorney.