An acquisition occurs when one company takes over another company and becomes the new owner. If you are a company looking to acquire another company, you will need to understand how acquisitions work and how to find quality target company candidates.
Pretty early in the acquisition process, you will be asked to write and submit an acquisition proposal to the target company. An acquisition proposal is a formal offer to purchase another company. Within your proposal you will identify the companies involved, describe the transaction, and attach related business documents.
Related: Mergers and Acquisitions
Typically, mergers and acquisitions follow a similar process that includes the following general phases:
Planning: Planning includes elements ranging from strategy, initial research, and investor pitching to communication plans and timelines. Thorough planning is crucial to any successful M&A.
Valuation: This phase entails several specific and highly detailed steps, including financial valuation, culture and synergy mapping, and due diligence. Acquiring companies can use several different techniques to evaluate an organization’s profitability or holdings; many opt to hire outside counsel to perform these analyses.
Integration: Once you’ve signed the deal, it’s time to integrate the two business entities. Successful integration requires planning for organizational structure, finances, roles and responsibilities, culture, and much more. Be sure to monitor integration over time and strive to continually improve.
Vietnam’s mergers and acquisitions market recorded steady growth since early last year, buoyed by foreign investors who desire a speedy entry into the large market of over 96 million people. However, whether the market will continue flourishing in the time to come depends on how existing hurdles are tackled. Although the M&A market here has become more familiar with foreign investment, some challenges still linger. Investors often complain about the transparency of financial reports and the auction process at state-owned enterprises (SOEs), for example.
For a step-by-step walkthrough of M&A processes or to be advised on How to Acquire Other Companies in Vietnam, contact GBS – A business law firm in Vietnam at info@gbs.com.vn or visit the website: https://gbs.com.vn