M&A transactions are on the rise in Germany. According to a report published by Wirtschaftswoche, mergers and acquisitions have gone up by 5.9 per cent in the first three quarters of 2015.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: Wirtschaftswoche reported on its website that there have not been so many corporate takeovers and mergers in Germany since 2008 as there have been in this summer quarter. According to the report, more than 28 billion euros have been turned over in the process and M&A (mergers and acquisitions) transactions have increased by 5.9 per cent in the first three quarters of 2015. North American investment was singled out as having gone up considerably.
It is currently not possible to predict whether this trend will continue. Rising sales prices could at least cause it to slow down. The prices that can be achieved in the context of mergers and acquisitions are ultimately dependant on the opportunities and risks involved. These can be ascertained in the course of a due diligence review, and on this basis an appropriate purchase price can be established. A detailed examination makes it possible to analyse the strengths and weaknesses of the target of a takeover bid and determine the purchase price after evaluating the data. Factors such as existing employment contracts, the order situation, liabilities, ongoing litigation and tax implications bear an influence on the purchase price, among other things. It is also important to consider whether a share deal could be the more sensible option, as it may make more sense to integrate individual parts of a business into one’s own company.
In addition to the economic factors that are capable of influencing the success of M&A transactions, it is also particularly crucial to be mindful of potential legal difficulties. The proposed transactions could, for instance, violate competition law. In cases involving international transactions, various different national laws need to be taken into account as well.
Complex company takeovers and mergers require a comprehensive economic evaluation and legal consultation. It can be both particularly effective and save time if the evaluation and consultation come from one source. Interdisciplinary law firms with specialised lawyers that cooperate with international partners can take a solutions-oriented approach to pursuing these objectives.
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