What legal preparation is needed for M&A including contract legal review?

Hello. I am an M&A attorney at Daeryun Law Firm (LLC).

You asked about the overall legal preparation for M&A including contract legal review. Let me explain the legal preparation by stage of M&A.

First, in the preliminary preparation stage, you need to first review whether the transaction is possible.

It is a priority to check whether there are approval requirements or transaction restrictions under laws or internal regulations.

Currently, in our country, there is no single law that comprehensively manages M&A.

Therefore, it is important to accurately understand and analyze the regulations scattered across various laws such as the Monopoly Regulation and Fair Trade Act, the Capital Markets and Financial Investment Business Act, and the Commercial Act.

In the contact stage with the acquirer, you need to understand the permitted transaction forms (asset transfer, stock transfer, triangular merger, etc.).

It is good to compare the advantages and disadvantages of each transaction structure to establish a strategy.

In the due diligence and progress stage, since issues revealed through due diligence must be reflected in the contract, legal risks must be identified in advance to remove risk factors.

In the contract stage, including contract legal review, responsibility distribution and effectiveness are discussed to suit the transaction purpose.

At this time, the meaning of contract clauses with legal binding force must be clearly understood and prepared for.

Legal preliminary preparation is also important in the final closing stage.

Covenants, payment methods, etc. must be reviewed and prepared for in advance.

Since various legal reviews and regulatory issues may accompany the M&A process, we recommend proceeding systematically with the help of an M&A attorney.