M&A Deals in the USA

M&A transactions in the US include:

• purchasing shares of US companies;
• purchasing assets of US companies.

US: Concluding an International M&A Deal

Cross-border transactions are regulated by US laws & other applicable jurisdictions. Parties seeking to undertake a merger or acquisition of a US company must:

• sign an M&A agreement in the US;
• sign asset purchase agreements;
• sign registration rights agreements;
• sign shareholder agreements;
• conclude labor contracts.

Information to be Disclosed

Public companies are required to inform their stakeholders of all information relating to an M&A transaction in the US. Also, there is the Fair Disclosure Regulation requiring companies to disclose some confidential information.

Government Influence on M&A Transactions in America

The SEC (Securities & Exchange Commission) is authorised to prohibit the issuance of securities if the Securities Act isn’t adhered to. Also, transactions having implications for national security require notification & approval from the US government.

US: Financing a Deal to Buy a Public Company

If buyers require a loan to conduct an M&A transaction in the US, sellers may require them to attach the relevant documents to their SAP agreement. In their turn, sellers will strive to ensure that such financial documents don’t contain any conditions that differ from the conditions specified in the M&A agreement.

Wait Period

Wait periods are usually one month or less. Tender offers are disclosed within at least twenty working days; there’s a mandatory extension in case of a significant change in the terms of an offer.

Taxation

Normally, buying a public company in the US for cash is subject to taxation. Sellers retain all tax liabilities until a transaction is completed; after a transaction is completed, buyers become responsible for all tax liabilities.

Personnel

There’s a large number of federal laws & regulations governing employee rights. They also provide protection for employees if their companies are taken over or acquired. They include benefits after termination of employment, advance notice before mass layoffs or business closures & full funding of a retirement plan.

Restructuring & Bankruptcy

Companies facing bankruptcy fall under the jurisdiction of the bankruptcy court. As a result, all M&A transactions in the US must be approved by this court and a target company's creditors. Due to the complexity of federal bankruptcy laws, transactions involving a company going through bankruptcy or restructuring can often take a very long time.