M&A in Ukraine. Legal support of agreements

Business mergers and acquisitions (M&A) in Ukraine have become a significant element of strategic development.

Given the economic and political changes in the country during the last decades, the M&A market has undergone significant changes and opened up new opportunities for businesses, investors, and international corporations.

Currently, there is an increase in activity in the M&A sector, especially in the fields of information technology, energy, finance, and agribusiness, as a result of which there is an increase in the volume of concluded M&A deals.

M&A are complex and strategic operations that contribute to the strengthening of companies’ positions in the market and the development of business in the country as a whole.

The structure of the M&A agreement, which is determined by numerous factors, including financial, legal, and operational aspects, remains a relevant issue in modern realities.

Below are the main stages of preparing an M&A agreement for conclusion.

1. Preparation. Defining strategic goals and discussing possible conditions is the first step in the process of preparing an M&A deal. At this stage, the counterparty determines its interests, identifies potential partners, and conducts a preliminary assessment of the value of the business that will be subject to the acquisition (merger) process;
2. Discussion of contractual terms. This is followed by the discussion and agreement of the main terms and parameters of the deal, including the price, structure, and terms of payment, as well as the rights and obligations of the parties to the M&A deal, responsibility for violation of its terms;
3. Conducting a more detailed study. At the next stage, a comprehensive study (due diligence) is conducted, which includes checking the financial and legal documentation of the business that will be subject to acquisition (merger), assessment of assets and liabilities, analysis of risks and opportunities;
4. Conclusion of the Agreement. After the successful completion of the research and agreement on all terms of the agreement, the parties enter into a final agreement that contains all the necessary details and terms of the transaction.

The peculiarities of the conclusion stage and the structure of the M&A deal reflect the complexity and strategic nature of the business merger and acquisition process.

Careful planning, analysis, and negotiation of terms are key stages of successful acquisition and merger operations.

Aspects that should be given special attention during the drafting of an M&A agreement are:

• Price and payment method. Establishing a fair price for the shares or assets of the company, as well as discussing issues regarding cash, non-cash payment or combined options are key stages in negotiations when concluding an M&A deal;
• Thorough assessment. Conditions related to preliminary research (due diligence) include a thorough analysis of the financial, legal, and operational activities of the company, which allows the buyer to assess the risks and potential advantages of the transaction;
• Legal Warranties and Indemnities. This clause may include guarantees regarding the purity of the company’s legal status, the absence of hidden liabilities or disputes, as well as conditions for compensation in case of violations;
• Closing/abandonment of the agreement. These terms include the terms, conditions, and procedures for closing the deal, as well as the circumstances under which either party may withdraw from the M&A deal without compensation.

Qualified lawyers of JSC “Prikhodko and Partners” offer full legal support for the conclusion of M&A agreements, which will involve taking into account all stages of preparation.

We are ready to offer you the following services:

• preliminary consultation on legal aspects of M&A agreement support;
• development of a detailed plan for the implementation of all necessary steps for the successful implementation of the M&A deal;
• preliminary research of a potential counterparty (due diligence);
• assessment of potential business risks;
• compilation of all necessary documents/proper legal analysis of documentation.

Conclusions.

The M&A process is of great importance for the development of the economy and the attraction of international investments. Despite the complexity, the Ukrainian M&A market has significant potential for further growth and development in the future.

Therefore, it is important to responsibly approach the process of concluding an M&A agreement, which is inherently complex and quite complex, in particular in the legal aspect.

Therefore, the proper agreement of the terms of the M&A agreement between its parties, and actions by the mandatory stages of preparation for its conclusion, is a key stage of the successful implementation of M&A transactions in general.