In order for companies to grow and achieve greater growth, in addition to pursuing an IPO, there has been an increasing number of cases of buyouts (selling shares to each company by selling them to the other company) to major companies. Synergies with major companies are expected to increase corporate value, expand business, and become a powerful choice to IPOs.
Due diligence by the acquiring company is common in the buyout process, so the acquiring company needs to listen to experts’ opinions and respond to them. It is essential to consult with lawyers in advance, as there are many cases where a deal is broken or the amount of the transaction is reduced as a result of negotiation, contractual defects, or labor risks. When concluding a contract, it is common for the company and management to provide a representation and warranty.
However, it is recommended that the company carefully examines whether the warranty is guaranteed or not, and that the company consults with an attorney at law for the details of the contract, such as whether or not the contract has an unnecessary risk even after the acquisition due to the long-term obligation not to compete.
In addition to preparing and reviewing contracts, GVA also actively handles support for contract negotiations to ensure that the value does not become unreasonably low or risk-bearing after a buyout by attending negotiations with the acquiring company.