It is normal that during the life and development of companies, they adopt various growth and expansion strategies, with the aim of increasing profits. These strategies frequently respond to needs that arise in the practice of commerce, industry and also in the provision of services, which translate into more or less friendly contractual proceedings (Mergers & Acquisitions), although sometimes they occur in a hostile manner (Public Tender Offer - OPA).
Mergers and acquisitions (M&A) are common strategic transactions in the corporate world. They involve combining, buying or selling companies to achieve economic, financial or competitive objectives.
Business restructuring is a complex process that involves organizational, financial, operational or strategic changes to improve performance, adapt to a new environment or overcome difficulties.
Reasons for the Restructuring a Company:
Types of Restructuring:
Restructuring Steps:
Consequences of the Restructuring:
In conclusion, restructuring is a key process for the survival and growth of companies, but it requires rigorous planning and careful management of human and operational impacts.
Merger / Economic Concentrations / Partial Contribution of Assets / Corporate Spin-off / Corporate Takeovers / Public Tender Offer (OPA)
A corporate Mergers and Acquisitions (M&A) operation in Panama is a pooling of assets or economic interests between two corporations or commercial companies that results in a sale operation, after a process of convergence between the parties, i.e. a process of negotiation and commercial rapprochement that is interpreted as a purchase or exchange.
Merger: Two independent companies decide to merge into one, either by consolidation or by absorption.
Example: If Corporation A and Corporation B merge, they become Corporation C, with shareholders, assets, and common officers.
Acquisition: A company (the buyer) buys all or part of another company (the target). The target may lose its independence.
Example: If company X buys 100% of the shares of company Y, company (Y) becomes a subsidiary of X or disappears.
Why do companies do mergers and acquisitions?
Key Steps in an M&A Deal
On some occasions, the transaction may involve the exchange of securities, in payment of the price, in exchange for the assets transferred. The object of the operation is the ownership of an economic activity, effecting a transfer of ownership, in the event that this operation is successful, which may be total or partial. Similarly, the M&A transaction may involve specific assets and may even include the liabilities of the divested business.
The transactions we call Mergers and Acquisitions (M&A) are aimed at the ownership and control of companies, although they can also involve other types of entities or structures, such as cooperatives. M&A transactions allow beneficiary entities to optimize their resources, expand their business offering, strengthen their structures, increase or reduce their size and evolve their competitive position.
The decision to carry out a merger or acquisition is motivated by economic productivity strategies that justify the investment decision , i.e. the adoption of the necessary measures to achieve the objective, which involves an advanced level of planning and the allocation of the necessary resources, the ultimate goal of which is to obtain future revenues that allow the investment to be recovered and a certain profit to be made.
Therefore, a merger or acquisition will be successful to the extent that the purchase price justifies the effort, whether the purchase price is lower than the current value, which could create shareholder value. For this to be the case, the following elements must be taken into account:
When defining the objectives, it should be taken into account whether the restructuring of the company will be carried out through diversification operations, or through the creation of groups of companies, or through the implementation of offensive or defensive operations, through cost reduction and the production of synergies, or through direct acquisition or through a holding company, or to carry out :
Corporate restructuring can also be achieved through several methods, the adoption of which will depend on the resources available and the corporate strategy, for which the following are available:
The objective of the creation of this type of legal entity is to facilitate or develop the economic activity of its members, to improve the results and the commercial management of the members of the group.
On the other hand, we have groups of companies that work through holding companies to simplify the management of a group of companies or companies in order to allow the optimization of productivity, the reduction of operating costs and, in some cases, the channeling of financial flows, economies of scale and efficient capitalization, while obtaining the administrative and functional specialization of their members. Diversify risks, through vertical or horizontal integration of its components.
One of the important areas in which the regulation of the economy develops concerns activities that produce economic concentration, which must be understood as the effect of acts aimed at building the dominance of a small number of companies over the rest of their competitors, in the relevant market, of a particular type of industry or commerce.
This can happen due to factors such as economies of scale, barriers to entry, mergers and acquisitions, and access to resources. The purpose of controlling economic concentrations is to prevent significant restrictions on competition from occurring as a result of certain transactions and from resulting in harm to consumers, such as price increases or reductions in the quality, variety or innovation of goods or services.
In particular, it is intended to prevent economic operators who have been independent of each other from performing, inter alia, acts, contracts, or agreements for the purpose of the merger, acquisition, consolidation, integration or amalgamation of their undertakings, in whole or in part, with a view to controlling the market or eliminating or lessening competition, by means qualified as unfair or restricting the freedom of companies.
Thus, economic concentration occurs when one or more economic agents, who already hold significant market shares and control other economic agents, acquire, by any means, direct or indirect control of all or part of a larger number of economic agents.
These control operations can be carried out in two ways. First, amicably or consensually, through a contract for the sale of shares or shares allowing the acquisition of control of the company.
Similarly, secondly, the acquisition can be made aggressively, when it is a publicly traded company, also known as a public or regulated company, the acquisition must be made through a Public Tender or Exchange Offer, for which it must comply with the regulations of the stock market or securities market.
If you want to offer a Mergers and Acquisitions (M&A) service for companies, you will need to structure your offering according to the specific needs of your clients (buyers, sellers, investors) and your expertise. Here's a guide to building this service:
Offering M&A services requires technical expertise, a strong network, and an ability to manage complex processes. By targeting a niche (e.g. SMEs, specific sectors) and focusing on trust and transparency, you can differentiate yourself in this competitive market.
Our law firm specializes in providing services related to the commercial and business field, so it is possible for us to assist you in the creation or formation of your company or company, as well as in the development of it and, if necessary, in the closure, dissolution and liquidation.