In the ever-changing capital market, mergers and acquisitions are a game full of games, and the acquisition of control is more like a thrilling power struggle. If a company wants to win, it must make a key move in the legal chess game - the shareholders' meeting. Whether it is to deal with the opposition of small shareholders, break through the obstacles of legal supervision, or cleverly design the transaction structure, the decision-making power of the shareholders' meeting directly affects the success or failure of the merger and acquisition transaction.
In recent years, Goheal's research has found that the core controversy of many large-scale mergers and acquisitions is not only the business logic of the transaction itself, but also how to cleverly use the legitimacy and authority of the shareholders' meeting within the legal framework to make the transfer of control go smoothly.
Today, let's discuss the acquisition of control in mergers and acquisitions, see how companies use shareholders' meetings to deal with legal challenges, and reveal the key operations that ultimately turn the tide through classic cases.
Shareholders' meeting: the "offensive and defensive shield" of merger and acquisition transactions
The shareholders' meeting is the highest authority in the corporate governance structure, and its role in merger and acquisition transactions is crucial. In the process of controlling acquisition, the general meeting of shareholders not only bears the responsibility of "legal endorsement", but also can effectively deal with legal challenges from regulators, competitors and minority shareholders.
So, how does the general meeting of shareholders play a role in M&A transactions? We can look at it from the following three aspects:
1. Balancing conflicts of interest through voting rights
Control acquisition often leads to conflicts of interest between different shareholders, especially when it involves compulsory acquisition, which is more likely to cause dissatisfaction among minority shareholders. The privatization case of L'OCCITANE is a typical example.
During the compulsory acquisition of L'OCCITANE by the Hong Kong Stock Exchange, some minority shareholders questioned the privatization price and compulsory acquisition procedures, and even raised legal challenges.
However, under the promotion of the major shareholders, the privatization plan was formally voted through the general meeting of shareholders and finally passed with enough votes in favor, ensuring the smooth completion of the transaction.
The role of the general meeting of shareholders:
First, ensure that the acquisition plan is legal and compliant and reduce litigation risks.
Second, balance the interests of large and small shareholders and reduce transaction resistance.
2. Deal with legal and compliance challenges of cross-border mergers and acquisitions
Cross-border mergers and acquisitions often involve legal systems in multiple jurisdictions, and if you are not careful, you may fall into a legal whirlpool. The acquisition of BioNTech by BioMed Biotech is a cross-border acquisition case full of legal challenges.
Because BioMed Biotech adopts a red chip structure, the choice of its domestic and overseas transaction structure is crucial, and any carelessness may lead to the rejection of the regulatory authorities.
Through the formal resolution of the shareholders' meeting, the company was able to steadily advance the approval process, and finally obtained the approval of the regulatory authorities and successfully completed the merger and acquisition.
The role of the shareholders' meeting:
First, provide legal endorsement and enhance compliance.
Second, provide legal support for cross-border approval and increase the success rate of transactions.
3. Resolve antitrust and shareholder rights protection disputes
In mergers and acquisitions, especially when involving large-scale corporate mergers, antitrust regulations and shareholder rights issues are legal obstacles that cannot be circumvented. Geely's acquisition of Volvo is a very representative example.
When Geely acquired Volvo, it faced the review of antitrust supervision in many countries, and at the same time, it was necessary to ensure that the rights of the original Volvo shareholders would not be damaged by the acquisition.
In the end, Geely passed the resolution of the shareholders' meeting to ensure the fairness of the transaction, successfully passed the antitrust review, and completed the acquisition of Volvo.
The role of the general meeting of shareholders:
First, provide proof of shareholder recognition in antitrust review to increase the approval rate.
Second, strengthen legal protection in acquisition negotiations and improve transaction robustness.
The legal shield of the general meeting of shareholders: How do companies deal with legal challenges?
In M&A transactions, the general meeting of shareholders is not only a "voting place", but also an important tool for companies to legalize transactions. Goheal recommends that companies use the general meeting of shareholders to effectively deal with legal challenges in the process of acquiring control rights from the following aspects:
1. Plan the voting rights structure in advance
Ensure the support of key shareholders and reduce the risk of voting failure. At the same time, establish a "golden stock" or "super voting rights" mechanism to enhance the stability of control rights.
2. Ensure transparent information disclosure
Disclose acquisition details in accordance with the law to avoid shareholder objections or legal disputes due to information asymmetry. At the same time, provide detailed financial analysis to ensure that shareholders can make rational decisions.
3. Make full use of legal advisors and M&A advisors
Work with professional legal teams to ensure that the resolutions of the general meeting of shareholders comply with local laws and regulations. You can also design a reasonable transaction structure through external M&A advisors to increase shareholder support.
Conclusion: Is the general meeting of shareholders the "stabilizing force" of M&A transactions?
From the compulsory acquisition of L'Occitane, to Geely's acquisition of Volvo, to the cross-border merger and acquisition of Biomis Biotechnology, the role of the shareholders' meeting in mergers and acquisitions is crucial. It is not only a key link in the legalization of the acquisition of control rights, but also the best weapon to deal with legal challenges.
So, the question is:
1. Do you think the power of the shareholders' meeting in the acquisition of control rights should be further strengthened?
2. In future mergers and acquisitions, will the shareholders' meeting still be the most important legal tool?
3. In the current increasingly complex global regulatory environment, how can companies better use the shareholders' meeting to deal with challenges?
Goheal looks forward to your wonderful views, welcome to leave a message in the comment area for discussion!
[About Goheal] American Goheal M&A Group is a leading investment holding company focusing on global mergers and acquisitions holdings. It has been deeply involved in the three core business areas of listed company control acquisition, listed company mergers and acquisitions and restructuring, and listed company capital operation. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from mergers and acquisitions to restructuring and capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
