A “merger” means that two business entities voluntarily agree to join forces and combine their operations to create a new legal entity and a single business entity, while an “acquisition” means a company buys another company, takes over its operations, and presents itself as the new owner.
The purpose of mergers and acquisitions is to achieve distinctive added value for both deal parties. For example, company X has a strong asset base but faces challenges in marketing and management aspects while company Y has strong management and marketing capabilities but has no assets enabling it to expand its business.
Through merger or acquisition, by adding strength factors and eliminating weakness factors between both entities to form a new entity, a considerably higher capability, and revival will be achieved in terms of stability and growth for both entities.
It is worth mentioning that companies under the supervision of the Capital Markets Authority in Kuwait should comply with the Executive Bylaws of Law No. (7) of 2010 where Module Nine – Mergers and Acquisitions – highlight guidelines that should be taken into consideration when undergoing a merger or an acquisition process.
Module Nine “Mergers and Acquisitions” highlights the following:
| Appendix 1 | Procedures for executing a Merger Transaction |
| Article 2-7 | Procedures for executing a Draft Merger Contract |
| Article 3-1-6 | Independent advice from the Investment Advisor concerning Acquisitions must be made available to the shareholders or partners of the two companies (Offeror and Offeree). |
| Article 3-3 and Appendix 2 | Procedures for executing Voluntary Acquisition in addition to preparing the offer document |
| Article 3-3 and Appendix 3 | Procedures for executing Non-Cash Voluntary Acquisition in addition to preparing the offer document |
| Article 3-3 and Appendix 4 | Procedures for executing Competitive Acquisition in addition to preparing the offer document |
| Article 3-3 and Appendix 5 | Procedures for executing Mandatory Acquisition in addition to preparing the offer document |
| Article 4-1-9 | Independent advice from the Investment Advisor concerning the Partial Purchase Offer must be made available to the shareholders or partners of the two companies (Offeror and Offeree). |
| Article 5-7 | Procedures for executing a Draft Division Contract |
| Appendix 8 | Procedures for executing Reserve Acquisition in addition to preparing the offer document |
| Appendix 9 | Procedures for executing a Partial Purchase Offer in addition to preparing the offer document |
| Appendix 11 | Procedures for executing the Division in addition to preparing the offer document |
What is the added value to business entities from Mergers & Acquisitions Services?
- Attain competitive advantages that exceed the current situation.
- Provide expansion opportunities, which offer growth potential exceeding the traditional growth limits.
Why Baker Tilly Kuwait?
Baker Tilly Kuwait is distinguished by specialist professional experience and offers the following characteristics carrying added value to our clients as follows:
- Baker Tilly has a license as an Investment Advisor from the Capital Markets Authority;
- A global consulting firm with local presence in the State of Kuwait;
- Professional team with in-depth experience in providing investment consultancy services in Kuwait
What are the services provided by Baker Tilly Kuwait?
The below services can be provided individually or as a package:
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Conducting Purchase Price Allocation Exercise
Assisting in acquisition services such as Purchase Price Allocation exercises for recognizing the impact of the investment in the books of the buyer or buyer in line with International Financial Reporting Standards (IFRS).
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Facilitating Buy-Side/Sell-Side Transaction Advisory Services
- Responding to sales offers, formulating bids, negotiating deals, and ensuring transaction closure.
- Assisting the seller in submitting offers, evaluating bids, and successfully closing the transaction.
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Conducting Business Valuation
Conducting business valuation of the target company and preparing a business valuation report, either to the buyer or to the seller.
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Performing Due-diligence
Conducting thorough due diligence of the target company and providing a due diligence report on behalf of the buyer.
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Formulating Tax Implication Reports
Tabulating and reporting on post-acquisition tax implications, if any, on the financial statements of the company.
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Facilitating negotiations based on an independent framework to attain the interests of all parties to finalize the deals