The A to Z of M&As: Mergers and Acquisitions Explained

‍Mergers and acquisitions can unlock extraordinary growth opportunities, but they also raise a host of questions. Whether you're expanding into new markets or acquiring cutting-edge capabilities, understanding the legal nuances of M&As is crucial to making informed decisions.

We help clients navigate every phase of this journey, from initial planning and due diligence to negotiation, compliance, and integration. In this guide, we break down the most frequently asked questions about M&As.

So, what should you know before making your next big move?

Here’s what we’ll cover:

• What Is a Merger or Acquisition? Understanding the Basics
• What is the typical process for Mergers and Acquisitions?
• What is the Q&A process in M&A?
• How do legal issues impact Mergers and Acquisitions?
• What does a Mergers and Acquisitions lawyer do?
• Need help with an M&A transaction? Let’s talk.

What is a Merger or Acquisition? Understanding the basics

Growth can come in many forms, but few are as transformative as mergers and acquisitions (more commonly referred to as M&A). Whether you're joining forces with another company or taking one under your wing, this is perhaps one of the biggest moves you’ll make in the lifespan of your business.

Merger vs. Acquisition: What’s the difference?

“Mergers and acquisitions” are often grouped together, but the legal mechanics differ sharply across jurisdictions. In the United States, true statutory mergers exist. In Australia and the United Kingdom, however, what’s commonly described in business headlines as a “merger” is almost always, in legal terms, an acquisition - structured through shareholder-approved, court-approved or regulatory pathways.

Australia

Australia does not recognise a “statutory merger” in the American sense. Instead, combinations are achieved through one of two acquisition structures:

• Schemes of arrangement: A court-approved process under the Corporations Act 2001 (Cth) where target shareholders vote to transfer their shares to the acquirer. Schemes require approval by 75% of votes cast and the majority in the number of shareholders, followed by Federal Court sanction.

• Takeovers: A more direct route, where the bidder makes an offer to acquire shares from the target’s shareholders under the Corporations Act and ASIC supervision.

In both cases, the end result is that one entity acquires another. The target either becomes a subsidiary or is dissolved post-acquisition. What the market calls a “merger” in Australia is, legally, an acquisition.

United Kingdom

The UK framework mirrors Australia’s in many respects: there is no US-style statutory merger procedure. Transactions are implemented through:

• Schemes of arrangement: Court-sanctioned mechanisms under the Companies Act 2006, requiring at least 75% shareholder approval by value and a simple majority by number.

• Takeovers: Governed by the UK Takeover Code and enforced by the Takeover Panel, which imposes strict timetables, mandatory bid rules, and restrictions on defensive tactics once an offer period begins.

In practical terms, “merger” is a commercial shorthand for an acquisition of control, not a merger of equals.

United States

The US recognises genuine statutory mergers under state law (commonly Delaware). These allow two entities to legally combine into one surviving corporation. Alongside these, US law offers several acquisition formats:

• Stock acquisitions: The buyer purchases the target’s shares directly.
• Asset acquisitions: The buyer selectively acquires business assets and liabilities.
• Triangular mergers: Structured through a subsidiary to manage tax exposure or isolate liabilities.

US corporate law offers greater structural flexibility than its UK and Australian counterparts, with merger mechanics embedded in state statutes and subject to federal oversight for antitrust and securities law compliance. 

Despite their differences, both mergers and acquisitions are used to achieve similar goals:

• Expand into new markets
• Diversify product or service offerings
• Streamline operations and cut costs
• Gain access to new talent or technology

What is the typical process for Mergers and Acquisitions?

Mergers and acquisitions aren’t one-size-fits-all, but they generally follow several structured steps that help reduce risk while driving value. Whether you’re a buyer or a seller, understanding this process is key.

Step 1: Define your strategic objectives

Before any deal can begin, you need to be crystal clear about your goals. Are you looking to enter a new market, acquire talent, expand your product line, or gain operational efficiencies? Knowing your "why" will shape every step that follows and help you identify the right target.

Step 2: Conduct preliminary evaluation

Once a potential partner or target is identified, an initial assessment is crucial. This means evaluating financial health, operational compatibility, and cultural fit. It’s your first gut check: Does this company align with your vision? 

In cross-border transactions, it’s also wise to consider foreign-investment restrictions (e.g., CFIUS in the US, FIRB in Australia, or NSI in the UK) and tax implications early, as these can shape deal feasibility and timing.

Step 3: Due diligence

Due diligence is the most critical stage. It’s where assumptions meet evidence. The buyer (and often its advisers) will conduct a detailed review of:

• Financials: revenue trends, debt, and working capital;
• Legal matters: contracts, litigation, regulatory compliance;
• Intellectual Property: ownership, licensing, and transferability;
• Employment: key personnel, benefits, and transfer obligations (e.g., TUPE in the UK or transfer-of-business rules in Australia)
• Privacy and cybersecurity: compliance with data-protection regimes such as the GDPR or CCPA
• Regulatory and competition law: whether filings or approvals are required (e.g., HSR, CMA, or ACCC reviews)

The aim is to confirm value, surface hidden liabilities, and identify deal conditions, warranties, or indemnities to manage risk.Step 4: Negotiate the terms

With the facts in hand, both parties enter into negotiations. This phase covers valuation, price, transaction structure (cash, stock, earn-outs, etc.), representations and warranties, indemnities, closing conditions and other key terms. It’s about finding a win-win balance while protecting your interests. Negotiation styles and disclosure standards differ slightly between the US, UK, and Australia, but the goal is universal: to strike a deal that balances opportunity with protection.

Step 5: Draft legal documentation

Once terms are agreed upon, lawyers draft the formal agreements, typically including a purchase agreement, disclosure schedules, shareholder, board or other approvals, and ancillary documents (NDAs, IP assignments, employment agreements, etc.). These documents legally bind the deal and clarify each party’s rights and responsibilities.

Step 6: Closing the deal

The transaction is finalized with signatures. Once clearances and conditions are met, the parties sign and exchange documents, transfer funds or shares, and complete the transaction. Ownership, and legal risk, officially passes to the buyer.

Step 7: Post-merger integration

This is where the real work begins. Successful integration involves combining people, systems, processes, and culture. It’s crucial to have a detailed integration plan that maintains momentum, aligns teams, and minimizes disruption.

What is the Q&A process in M&A?

The Q&A process is where the serious questions get asked and answered, so both sides can move forward with confidence. If you’re buying a company, this is your chance to dig deeper than surface-level data. If you’re selling, it’s your opportunity to build trust by being transparent and well-prepared.

Why Q&A matters

Even with access to data rooms and documents, written Q&A and expert calls surface issues that aren’t obvious on paper, like customer churn masked by discounts, change-of-control triggers hiding in order forms, open-source license conflicts, AI/data training rights, or privacy non-compliance that would complicate integration.The Q&A phase allows the buyer to ask focused questions, record undertakings that can be converted to closing conditions, covenants, or price adjustments.

Common areas of inquiry include:

• Financials: Are revenue streams stable? Are there any off-balance-sheet liabilities?
• Contracts: Are there any customer or supplier contracts with change-of-control clauses?
• Employees: Are key personnel locked in? Are there any ongoing HR issues or legal disputes?
• Compliance: Is the company in good standing with regulators? Any unresolved investigations?
• Intellectual property: Who owns what? Are trademarks, patents, and licenses properly protected?

How do legal issues impact Mergers and Acquisitions?

From deal structure to regulatory compliance, legal considerations shape every phase of an M&A transaction. Overlooking even one issue can result in delays, fines, or worse; deal failure.

Here’s what’s at stake, and why having legal counsel from day one is essential.

1. Antitrust and competition law

Regulators around the world keep a close eye on mergers that could reduce competition or create market dominance. The complexity of this review depends on deal size, market share, and sector sensitivity.

• In the US, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) may require pre-merger notifications under the Hart-Scott-Rodino Act. Since 2025, the HSR filing form requires significantly more narrative information on deal rationale, competitive overlaps, and customers, and fees have been updated. Failure to file or to observe the mandatory waiting period can result in substantial civil penalties.
  
  
• In the UK, the Competition and Markets Authority (CMA) may review mergers meeting turnover or share-of-supply thresholds. This CMA regime remains voluntary in principle. However, the National Security and Investment Act (NSI) Act 2021 imposes mandatory pre-closing notification in 17 sensitive sectors.
  
  
• In Australia, the ACCC (Australian Competition and Consumer Commission) currently administers a voluntary notification system, but a new mandatory, suspensory merger regime takes effect from 1 January 2026. Until then, parties are encouraged to seek ACCC “informal clearance” for significant deals. 

Failure to anticipate these reviews can delay closing or lead to deal-killing objections.

2. Corporate and securities law compliance

For public companies, M&A transactions must comply with stringent securities laws. This includes timely and accurate disclosures to shareholders, analysts, and regulators. Insider trading concerns, proxy rules, and shareholder voting requirements all come into play.

For private companies, while disclosure rules are looser, buyers still need a clear picture of the corporate structure, capital table, and any third-party consents required for the deal.

3. Cross-border regulatory challenges

International deals introduce layers of legal complexity:

• Foreign investment rules (eg: FIRB approvals in Australia)
• Tax treaties and withholding obligations
• Differing employment laws and IP protections

Each country has its own playbook, and missing even a local licensing issue can grind progress to a halt.

4. Contractual and structural risks

Legal issues can also hide within existing contracts. Look out for:

• Change-of-control clauses that may trigger renegotiations or early terminations
• Restrictive covenants that may limit operations post-deal
• Pending litigation that could result in liabilities down the line
• Open-source or AI-training data restrictions that can affect future product use or licensing

A strong legal team will surface these risks during due diligence and help you decide how to handle them in the deal documents.

What does a Mergers and Acquisitions lawyer do?

M&A deals are complex. They move fast, involve high stakes, and touch every part of a business, from financial structure and IP to people, branding, and regulatory exposure. That’s where an M&A lawyer comes in - not just to draft documents, but to be your legal strategist, risk manager, and trusted advisor every step of the way. Let’s tackle the key roles an M&A lawyer plays…

1. Structuring the deal

The right deal structure determines how value is captured and how risk is managed. An M&A lawyer helps determine whether the transaction should be structured as a share (stock) purchase, asset purchase, merger, or scheme of arrangement (in the UK or Australia). Your lawyer will help structure the transaction to best suit your business goals, minimize tax exposure, and manage liability.

• Evaluate the pros and cons of each deal type
• Advise on regulatory triggers and compliance timelines
• Build a structure that aligns with your strategic priorities
  

2. Drafting and negotiating key documents

An M&A lawyer takes the lead on preparing and reviewing all legal documents, including:

• Letters of intent (LOIs) or term sheets
• Non-disclosure agreements (NDAs)
• Purchase or merger agreements
• Disclosure schedules and ancillary agreements

They also negotiate terms like indemnities, earn-outs, non-competes, and closing conditions, protecting your interests while keeping the deal on track.

3. Conducting legal due diligence

Your lawyer will lead a thorough legal review of the target company to identify any:

• Contractual restrictions or hidden liabilities
• Litigation risks or compliance issues
• Regulatory or antitrust concerns
• IP ownership or licensing gaps

This intel is critical to negotiating favorable terms, or walking away if the risks outweigh the rewards.

4. Managing regulatory and shareholder approvals

Depending on the nature of the transaction, your lawyer may guide you through:

• Antitrust filings 
• Securities filings and shareholder disclosures
• Board and shareholder approval processes

They make sure nothing falls through the cracks, especially when timelines are tight.

5. Facilitating a smooth closing and transition

Even after the ink dries, your M&A lawyer helps manage post-closing tasks:

• Finalizing document filings and notices
• Managing escrows and holdbacks 
• Addressing disputes or unforeseen obligations
• Supporting integration efforts, including employee transitions and vendor re-negotiations

Wrapping Up: M&As

Whether you’re looking to scale, diversify, enter new markets, or consolidate strengths, the success of your M&A journey hinges on preparation, clarity, and the right advice at every step.

From defining your strategy and conducting due diligence to negotiating terms and navigating international laws, each phase is a chance to create long-term value or expose your business to avoidable risk. That’s why informed decision-making, transparent communication, and experienced legal counsel are paramount.

Tackling an M&A? Our experienced M&A attorneys offer strategic advice tailored to your needs, ensuring a smooth and successful M&A process, whether you're buying or selling a business.