7.M&A

For a company’s growth, developing and selling your own products and services is a typical and fundamental endeavor. However, buying another company or business can be an important strategy as well, in order to acquire existing products or services, or to acquire certain technology, a factory or customers. Private companies in particular will often acquire other companies in order to expand their market share or to increase their product or service lineups. When acquiring a company or business, it is very important to verify the objectives and impact of such an acquisition from a business standpoint, but it is also important to check whether or not the target has any issues from a legal or accounting standpoint. Also, it is necessary to examine what kind of acquisition structure is appropriate considering various issues, such as the proposed time schedule, potential tax problems and the target’s relationships with its business partners. In general, the basic acquisition structures are (1) share purchase, (2) merger, (3) corporate split (kaisha bunkatsu), (4) business (asset) transfer, (5) share exchange (kabushiki koukan), and (6) share transfer (kabushiki iten). Each has its advantages and disadvantages. In addition, you have to determine the valuation, negotiate the terms, incorporate the terms into a written agreement, and complete the closing procedures.

AZX provides support on various aspects of M&A transactions, including legal and accounting due diligence, calculation of the share price or enterprise value, determination of the acquisition structure, procedural advice under Japanese laws such as the Financial Instruments and Exchange Law and the Anti-Monopoly Law, drafting and negotiation of the acquisition documents, and other procedures related to the acquisition. In particular, we can provide advice on both legal and accounting matters. Further, if intellectual property or labor issues arise during the legal or accounting due diligence or consideration of the acquisition structure, we can provide support through specialists within the AZX Group, such as patent lawyers (benrishi) and certified labor specialists (sharoushi).