M&A for the beginner

As a corporate lawyer in the law firms of my early career, M&A deals provided the most challenges, and not just in terms of the work. Try to maintain a family during a major M&A deal!

My 38th birthday occurred in the middle of the largest and most complicated M&A deal that I handled in Paris, the acquisition by Bristol-Myers Squibb of 40% of the UPSA Group of companies, headquartered in France. I ended up not going home that evening. My thoughtful wife, herself a lawyer, must have figured out what was going to happen. She arrived late in the evening with a lovely birthday cake, shared with my boss, Jack Kevorkian, and colleagues on the deal, not forgetting the bankers (Goldman). Everyone was most appreciative, and we all continued working through the long night.

That deal gives you an idea of the legal and business challenges of a major M&A deal. First, BMS was only buying around 40% of UPSA, with put and call options on the remaining 60%. Frankly, that could have been a nightmare. Major multinationals do not like being in a minority position when they make such a substantial investment, but the seller was adamant and BMS really wanted the deal. So with our help, and in particular Jack Kevorkian’s brilliant strategies, BMS came to accept that minority role. Then there were the disparities between US and French corporate law to navigate to the satisfaction of both sides. The list goes on.

The principal Stock Purchase Agreement (there were others), which I drafted, came to about 2,000 pages with all Exhibits!

Back in the US, my most complex deal at WSGR was Micron’s purchase of TI’s memory business. This was massive, and my role was limited to the IT transitions (each company had basically developed its own manufacturing techniques, for example: very difficult to integrate), and the Japanese joint venture. Even that JV turned into a whole Closing Binder itself: The intriguing legal challenge there was that Micron had to assume TI’s role in a complex Japanese joint venture. You can see what I mean by interesting!

You need a major law firm to do a big M&A deal, but I have done several smaller transactions under my own shingle, and even some roles on the side of major deals. For example, I represented management of a startup being acquired when big law firms represented both buyers and sellers. That was a fascinating deal. Management were the inventors and driving force of the company, and all parties wanted to keep them happy. We did!

What do I bring out of all this experience to you here on the website?

Well first, if your company is a buyer or seller in a small M&A deal, that’s my specialty!

And if your company is involved in a major transaction, it’s worth knowing something about what the bankers and lawyers mean when they talk about “due diligence.” It’s a buzzword which appears everywhere, and is a very important part of any M&A deal.

The following posts are common sense summaries of aspects of the “due diligence” review conducted by an M&A purchaser (the “Acquirer“) of the company that it wishes to acquire (the “Target“). Each post is an FAQ. And yes, collectively, they do go on a bit, but it’s difficult to find guidance like this without paying the considerable fees of a lawyer who can explain it.

You can thank me later!