Mergers and Acquisitions Insurance

Mergers and Acquisitions Insurance

The three key areas for consideration if your company is thinking about a merger or acquisition in our opinion would be based on the...

  1. Purchaser
  2. Seller
  3. The joint parties merging

Mergers and acquisitions deals are successful when both buyers and sellers or companies merging, come out of the finance negotiations having taken into account the price paid, value to shareholders, benefits and potential risks.

Mergers and Acquisitions Insurance Quote

Mergers & Acquisitions – The Purchaser

They need to consider the following areas carefully before an acquisition;

  • Obtaining a independent actuarial and due diligence exercise.
  • Capital requirements to purchase.
  • Risk and development potentials.
  • Structured business development plan upon acquisition.
  • Redundancies and employment requirements, liabilities and costs.
  • Special consideration should be given to the ‘deal price’, what current business and orders the company has or will get, natural profitability and projected results.
  • Be well prepared at meeting with the seller, assess the possible points to be discussed, and have pre-counter replies to the areas that could be brought up in the negotiations.
  • Guidance from your advisers, and making sure that you appoint the right companies to represent your interests - solicitors, banks, brokers, accountants etc. It is important that you also get on with those companies’ representatives as personalities can often make or break deals!!
  • Deals where acquisitions have failed could have been pretty much down to that ‘Human Thing’. If you make or all some (or all) of the acquired company’s staff redundant you could be tearing out its very heart, and at worst those key ex-employees may set up as competition taking those loyal clients away from you.  So integration and handling of human resources should be a major factor in the purchasers deal.
  • Clearly Directors and Officers Insurance and Mergers and Acquisitions covers need to be considered.

Mergers & Acquisitions – The Seller

When selling your business you need to consider:

  • Your advisers, brokers, accountants and solicitors - these may not be your current advisers as sometimes it is better to obtain specific experts who may be more knowledgeable in mergers and acquisitions.
  • Clearly you need to obtain the maximum sale price at the lowest costs.
  • Consider the questions and information needed by the purchaser, and prepare responses and paper work accordingly.
  • How your employees are considered, don’t forget they could be an important asset to the business and the purchasers, so a well prepared exit concept should be thought out prior to the sale.
  • It maybe a very important factor to keep the possible sale of your business a very secretive and discrete affair when considering offers or purchasers.
  • You may need to consider the appraisal of the business where only part or blocks of the company are sold, as a better option than selling the whole structure.
  • Naturally the due diligence procedure, help with negotiations over price and contractual terms.
  • Clearly Directors and Officers Insurance and Mergers & Acquisitions covers need to be considered.

Mergers & Acquisitions – The Merge

When two companies (or more) join together both (all) sides need to look at the advantage to their company, what benefits will they obtain. Once again the important areas and negotiations will require due diligence of key directors and officers and their advisers at the highest level, consideration and best outcomes for each side will be paramount in the negotiations. Remember that not all mergers are on equal bases, very often a larger company takes over a smaller operation. So it is very important that a good balance is found and all sides come out feeling a solution has been achieved.

General Information

Increased shareholder litigation is a growing fact of life for UK companies, particularly those with USA exposures. With this increase in litigation comes a growing awareness of the responsibilities incumbent on directors and officers of companies.

This is especially true when the company makes a public offer of its securities. Signatories of a public prospectus have a personal responsibility for its contents and could therefore be found personally liable for the losses of securities holders arising from inaccuracies or misrepresentations within it.

This is just part of what the policy provides:

  • Cover for both US and non-US exposures, including SEC registered listings on all US or other world stock exchanges. Cover can also be obtained for securities being placed privately in the USA to Qualified Institutional Buyers (QIB's) under the Rule 144a exemption.
  • Insured includes the company and its directors, officers and employees for securities claims brought against them in connection with the offering.
  • At the request of the company, cover may be extended to insure the issuing underwriters.
  • Cover includes liability relating to the prospectus/listing particulars as well as negotiations, discussions and decisions in connection with the offering prior to their filing or issue.

For help, or if you wish to discuss the type of business or organisation for which you need cover, please telephone +44 (0) 1323 648000, fax +44 (0) 1323 648001 or e-mail info@professionalinsuranceagents.co.uk.