A deal should be structured considering agreement between buyer and seller. It should be time, cost and compliance efficient and as required under the law.
While structuring a deal following factors must be taken into consideration
Objective of the Deal
This includes the core objective set for deal of merger while structuring the deal it must be taken into consideration that objective is getting achieved fully.
Transaction Cost Involved
Transaction cost for merger majorly involves payment of professional fees and tax liability created or withdrawal of exemption deduction and allowances. Transaction costs involved in merger can go up to 5-10% of transaction size. However if transaction is structured well then the cost can be reduced to great extent.
Discharge of Consideration
Consideration being imperative aspect of merger deal should be discharged by taking in to consideration future financial, legal and strategic impact on acquirer company. Consideration for merger can be discharged through issuing own equity shares to target company's shareholders. However part consideration can be discharged through payment of cash or issue of debentures. Apart from the above, one has to remember that if the target companies are listed on the BSE and/or NSE, one has to meet all the Compliances related to the SEBI Takeover Code and the Listing Agreements before going on with process of merging with the Target Companies.
Approx. 2 Weeks