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Common Private M&A Deal Structures

Common Private M&A Deal Structures

In Hong Kong, as in many other jurisdictions, there are two main structures for private M&A deals:

  • Share purchase: This is the more common option, where the buyer acquires the shares of the company that owns the target business. This gives the buyer ownership of the entire company, including its assets, liabilities, and history.

  • Asset purchase: In this structure, the buyer purchases specific assets of the target business directly from the company. This can be useful if the buyer only wants certain assets or wants to avoid inheriting the seller's liabilities.

It's important to note that a combination of these two structures can also be used, depending on the specific circumstances of the deal.

Additionally, auction processes are fairly common in Hong Kong for private M&A deals.

These often involve a two-stage bidding process:

  • Indicative offer stage: Non-binding bid letters are submitted by potential buyers.

  • Final offer stage: Binding bid letters are submitted by the shortlisted buyers.

For more information on common deal structures in Hong Kong, you can contact Bestar.

How Bestar can Help

Common Private M&A Deal Structures

Here are some possibilities on how Bestar might assist in these deal structures:

  • Structuring expertise: Bestar, as a corporate advisory firm, has the expertise to help navigate the different deal structures like share purchase or asset purchase, considering factors like tax implications, risk allocation, and deal efficiency.

  • Transaction execution: We assist with the preparation and negotiation of key transaction documents, including the purchase agreement, due diligence process, and closing documentation.

  • Regulatory guidance: We provide guidance on navigating relevant regulations and approvals in Hong Kong related to the specific deal structure.

  • Market knowledge and connections: Bestar could leverage our knowledge of the Hong Kong market and our network of contacts to facilitate the deal process, potentially connecting buyers and sellers or identifying potential financing options.

For a more definitive answer on how Bestar can help in specific deal structures, reach out to Bestar and inquire about our services related to private M&A transactions in Hong Kong.

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