Mergers and acquisitions

What is M&A?

In very broad terms, mergers and acquisitions (M&A) is concerned with the sale and purchase of companies and/or their assets. M&A departments advise on a broad range of transactions involving acquisitions or disposals of private companies, takeovers of companies that have their securities listed and traded publicly, and restructuring. The scale and scope of the deals that M&A lawyers advise on can vary greatly depending on the size and nature of both the firm and the client.

M&A is usually at the nexus of a lot of transactions and serves as the connecting link with other practice areas such as finance, tax, real estate, employment and regulatory. International firms will often work with colleagues and local counsel around the world on M&A matters.

M&A practices encompass a wide range of corporate matters, including both public and private M&A, as well as private equity and private capital deals. Such varied deals ensure that lawyers who specialise in this area learn a range of different skills and can add value to a host of different clients. As a trainee, you will likely be encouraged to work across a broad mixture of transactions. If you qualify into the M&A department, you will usually begin to specialise as you become more senior.

Useful/key skills

Any M&A department is likely to be a busy, transactional team so the usual qualities of a good lawyer come in handy. These include attention to detail, time management, commercial awareness, teamwork and, very importantly, a good attitude. Being organised is crucial since a large part of a junior M&A lawyer’s day is project management. It is also vital to ensure that advice is commercially focused – being able to tailor your research to a client’s specific needs is a must and a key skill that distinguishes a good lawyer from a great lawyer. It follows that putting in the effort to acquire an understanding of clients’ businesses pays dividends over time.

Like any area where tight deadlines are involved, the ability to cope under pressure and stay calm when things start getting busy is important, too.

Realities of the job

M&A can be extremely varied – no two clients are the same and you will never repeat the exact same transaction. The subject matter of the deals you work on provides natural variety to the work too. You could be working on a public takeover, a cross-border merger, a complicated transport deal and/or private equity transactions, to name but a few examples.

The hours in M&A can be very long, especially when the date of a closing is approaching. Because of the fast-paced nature of the deals, this often means that tight deadlines can appear out of nowhere, and late nights and weekend working, often sprung upon you at the last minute, are not unheard of. However, the work is interesting and the unique buzz from ‘getting the deal done’ is usually enough to keep M&A lawyers motivated.


Day-to-day work

There isn’t really a ‘typical’ day, but from an early stage you can expect to be involved in due diligence (the process by which the target business or company is investigated by a prospective buyer) and drafting transaction documents (from the corporate authorisations required to the sale and purchase agreement, shareholders’ agreement and articles of association). You could also spend part of your time managing logistics, instructing local counsel where required and preparing engagement letters and draft bills.

Ensuring you keep up with developments is – as it is for all lawyers – very important. The firm may have training programmes in place to ensure that staff are up to date, but you should also take it upon yourself to keep abreast of any developments, legal or commercial, in the area. This ensures that you are able to provide the most correct advice to clients.

Some firms will send trainees and/or associates on client secondments. These placements provide invaluable insights into a client’s business and gives a unique perspective on the needs and issues facing a client during a deal.

Recent developments in this area

The Market Abuse Regulation (MAR) took effect in July 2016. MAR addresses areas such as insider dealing, unlawful disclosure of inside information and market manipulation. One notable effect of MAR is that it has extended the application of the EU’s market abuse rules from regulated markets to multilateral trading facilities and certain other markets, including exchange-regulated segments of the Irish Stock Exchange and the Luxembourg Stock Exchange. These have historically been popular with non-EU issuers in the United States and Latin America. Part of the role of M&A lawyers includes explaining to clients how MAR has revised some of the rules (or introduced new rules) in relation to delayed disclosure, market sounding procedures, stake building and insider lists.

On the private M&A side, certain deal features (that were not previously typical in the UK) are becoming more common, such as material adverse change conditions, ‘certain funds’ and termination rights for breach of warranty. These features would have a significant impact on a transaction and show how important it is to keep clients up to date on legal and regulatory developments.

Trends

In 2018, acquiring technology is the most popular reason for M&A. Other popular motives include expanding customer bases in existing markets, adding to product offerings or diversifying services, digital strategy and talent acquisition.