Business M&A services in the UAE
Mergers and acquisitions are a complex area as you are entering a new market. To make this important decision, the finance and management department develops plans, strategies, and feasibility studies. Business structures for transactions have two possible outcomes – either they add value to your business or they create losses. This is why companies seek expert advice if they are planning to merge or form a new company. To set up a safe joint venture, merger, and acquisition, you need to hire a professional team of chartered accountants in the United Arab Emirates. Let’s understand the key issues before merging your organization into a new structure.
The difference between a merger and an acquisition
A merger refers to the coming together of two or more organizations under one trading name. This merger creates an entirely new joint venture, which reduces market competition and trade barriers. The main reason for a merger is to combine the strengths and weaknesses of the organizations to form a single entity. There are different types of mergers, such as
- Horizontal mergers
- vertical mergers
- Congeneric Merger
- market extension mergers
- reverse mergers
- Conglomerate mergers
- Product extension mergers
A takeover is a process by which a business is acquired by another company. It can be carried out by acquiring 51 % of the capital of an undertaking. Although there is no new organization, a formatted and influential structure is stronger than the target company. The acquisition increases shareholder value and broadens the scope of the company. Some of the types of acquisition are listed below:
- Friendly acquisition
- Hostile acquisition
- Buy-out acquisition
Why do companies engage in mergers and acquisitions?
Mergers take place for a variety of strategic reasons, but the main objective is to increase profits. Organizations involved in mergers and acquisitions, when they seek to
- restructure financial and management operations
- reduce operating and utility costs
- Improve overall business performance
- Saves marginal supplier costs
- Opportunity to gain revenue synergies
- Reduces the company’s capital risks
UAE legal requirements for mergers
Mergers and acquisitions in the UAE are governed by Federal Law No. 2 of 2015 on Company Law and Federal Law No. 4 of 2012 on Competition Regulation. The statutory guidelines set out restrictions on the transfer of shares of the companies involved, foreign ownership, and other merger regimes. Companies operating in the UAE’s free zones and on the mainland have a separate regulatory framework for mergers and acquisitions. The relevant authorities are the regulatory authorities to which companies submit merger and acquisition applications.
M&A regulatory authorities
- Securities and Commodities Authority for listed entities
- Competition Regulatory Committee of the UAE Ministry of Economy
- UAE Central Bank for banks and licensed financial companies
- Department of Economic Development in each of the Emirates
Documents required for M&A
The UAE regulatory authorities mainly require the following supporting documents:
- Letter of Offer
- Shareholders’ agreements
- Sale and Purchase Agreement
- Share transfer form in Arabic or English
- Letter of intent/conditional agreement
- Agreements for transfer of specific assets (if asset sale)
- Disclosure letter together with a set of disclosure documents
- Corporate mandate with resolutions of board members, shareholders, and proxies
- Additional documents (transition services agreement, contracts with key employees, intellectual property licenses, and other relevant documents).
What should be considered during mergers and acquisitions?
There are some key points for SMEs to consider when undertaking strategic conglomerations. Management and finance staff need to analyze every aspect of the influential company as well as the target company. They need to decide what legal form of business they need, the tax treatment after the transaction, management integration, and many other factors. This is often a complex task for an in-house team, so they may outsource to experts in business advisory services in the UAE. Professionals handle your M&A activities and take into account a number of important factors.
What is included in our mergers and acquisitions service?
Our certified legal and business advisors are ready to provide you with exclusive mergers and acquisitions services for individuals and companies. We cover the following areas when offering mergers and acquisitions services:
- Helping to legally structure an organization
- Proper planning and implementation of synergies
- Advising on tax compliance
- Preparation of documents for transaction integration
- Post-merger and acquisition support
- Develop portfolio strategy
- Recommendations to maximize shareholder value
Why choose BesatxCA?
Bestax chartered accountants and business advisors offer client-focused services in the UAE. With over 15 years of experience, our team helps companies with financial accounting, auditing, tax compliance, and many other services. Our extensive knowledge of various sectors saves clients from fines and other legal hassles. Our strategist offers mergers and acquisitions services to optimize operational, managerial, and financial transactions. We advise individuals and companies on how to maximize value while minimizing risks. With BestaxCA, you get tailor-made solutions for all your M&A transactions. Our specialists have efficient merger and acquisition options.
BestaxCA always ensures logical recommendations, expert-led negotiations, and successful completion of each project handled. We take care of all legal requirements during the M&A process and help you stay on top of the authorities.
Contact the BestaxCA team and consult us for strategic mergers and acquisitions services on a global scale.
Call: +971 56 7981808