Intra-group Merger Agreements

Meyerlustenberger Lachenal (MLL) has joined PartnerVine with, among others, a set of intra-group merger agreements. The parent-subsidiary merger agreement is for merging a subsidiary into a parent company, and the subsidiary merger agreement is for the merger of two subsidiaries. This blog is a question and answer session about the merger agreements with Alexander Vogel, the head of MLL's Corporate & Finance Department.

PartnerVine: MLL is now selling merger agreements and related documents like commercial register applications and board resolutions, when would a company use these agreements?

Vogel: We are starting with two transactions sets, a parent-subsidiary merger and a merger of subsidiaries. There may be a legacy company that has outlived its purpose, for instance, and is continuing to incur expenses for the accounting team without any benefit for the group. Many mergers are done to rationalize an organizational chart, and these agreements will help in-house counsel to implement such group internal consolidation of legal entities without the help of outside counsel. The outside counsel will instead focus on the blueprint of such group internal consolidation of entities and thus advise the in-house counsel how to best consolidate such group companies, i.e. by way of a group internal merger, or alternatively a transfer of assets to another group company, or the liquidation of a company. We are currently preparing the required legal documents for such transactions as automated templates and will be offering them on PartnerVine soon in order to provide in-house counsel with the entire set of documents for the various types of structure reorganizations. These kinds of situations come up all the time for in-house counsel, and we hope we will be providing them real value by helping them do their work more quickly and efficiently. 

PartnerVine: MLL has prepared sets of documents for applications to the commercial register for both a parent-subsidiary merger and a merger of subsidiaries, what does a company do with those documents once they've gone through the automated questionnaire?

Vogel: When you've gone through the questionnaire, you've got your basic documentation for a filing with the commercial register. In-house counsel would need to give some thought - and maybe consult with outside counsel - as to whether there are additional issues that need to be addressed, e.g. a tax ruling in certain specific cases or the prior information of a particular important counterparty, but in our experience these filings are fairly standard. After that, the applications need to be filed with the commercial register. Many of our clients have someone internally that does that, but if a company needs support we can, subject to our conflicts check, help them with the filing. 

PartnerVine: How can customers get help if they have specific facts and circumstances that need to be addressed?

Vogel: If customers need help, we are standing by. Send an email to PartnerVine or to us directly at assistance@mll-legal.com and we will get back to you quickly. We do need to conduct a brief conflict check to be sure the advice a customer may need isn't provided in a situation that is adverse to one of our other clients, but, subject to that conflict check, we can get up to speed quickly and efficiently on the basis of a blackline. 

PartnerVine: You have posted a set of board resolutions for a simplified merger - are those resolutions supposed to work both for parent-subsidiary and subsidiary mergers?

Vogel: Yes, we put together two sets of resolutions for a simplified merger, one for the transferring company and one for the company that will survive the merger. They are custom-made and integrated in the document sets for both a parent-subsidiary merger and a merger of subsidiaries. 

PartnerVine: Can you explain why these merger agreements are considered intra-group merger agreements? 

Vogel: The merger agreements are for situations where all participants are members of the same group of companies and thus do not have conflicting commercial interests. We've taken a sensible approach for items that can be highly negotiated in a merger, like the liability and indemnity provisions. Our premise is that those clauses should meet the arm's length principle, but when you unpack the facts and circumstances in any merger, you can end up with a wide range of wording that is reflected in the consideration. That can happen in both an intra-group merger and a merger of third parties, and really indicate how much the individual facts and circumstances of a deal come into play. The documents we're selling don't cover individual facts and circumstances obviously, but we think the agreements will be suitable for many intra-group merger situations. The agreements aren't a substitute for legal advice for the blueprint of the transaction - they're a tool for in-house counsel to efficiently implement that legal advice. 

PartnerVine: Is there anything you are particularly proud of in this project?

Vogel: I'm proud of the team effort that went into these documents. I'm the head of MLL's Corporate & Finance Department, but the agreements and other documents are the product of the hard work of many members of the MLL team. Camillo Devecchi and Olivia Grabik have done the lion's share of the work for the document content and automation, and Lukas Bühlmann and Michael Reinle have been indispensable in terms of getting started on PartnerVine and supporting our digital strategy. I'm very proud of the team, and looking forward to expanding the offer.

PartnerVine: Thanks!

Nothing in this blog may be relied on as legal advice. Please consult your own counsel for advice specific to your facts and circumstances. 

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  • Attorney at law - Structured Financing - M&A - Crypto

    Great daring project !

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