Mergers and Acquisitions (M&A)

In the purchase and sale of a company, price is the variable that least protects the buyer and least assures the seller. What decides the outcome, months or years later, is the allocation of risk: who answers for pre-closing tax liabilities, what happens if a key customer terminates, how the earn-out is calculated, how much is held back and for how long.

A good share of post-closing disputes has the same origin: due diligence performed to confirm the deal rather than to uncover what could prevent it. When the liability surfaces later, the discussion migrates from the contract to the courts — and the seller has already spent the price.

Who we act for

• Strategic buyers acquiring competitors, suppliers or distribution channels
• Sellers and founding partners in full or partial exits
• Financial investors in capital injections, minority investments or acquisitions of control
• Family-owned companies that receive an acquisition offer and must prepare for due diligence
• Remaining partners, negotiating their position after a new controller comes in

How we work

We start by defining the structure before the price: a purchase of quotas or shares, an asset deal, a merger or a transfer of a going concern (trespasse) produce very different consequences for tax succession (Art. 133 of the Brazilian Tax Code), labour succession (Arts. 10, 448 and 448-A of the Brazilian labour code — CLT) and succession in contracts (Art. 1,148 of the Brazilian Civil Code). Choosing the structure after agreeing the price is the most common source of renegotiation.

We conduct legal due diligence focused on deal breakers and on quantification: it is not enough to list contingencies — one must say which become a price reduction, which become a holdback, which become a representation and warranty with specific indemnity, and which are assumed risk. That map is what structures the negotiation of the agreement — and what keeps the discussion from returning after closing.

For each transaction we assemble the project team according to the target’s sector and size, integrating partner professionals on the tax, labour, environmental and regulatory fronts the diligence requires.

Scope of work

• Deal structuring and comparative analysis of alternatives
• Memoranda of understanding, letters of intent and confidentiality agreements
• Legal due diligence and quantified contingency reports
• Negotiation and drafting of share (quota) or asset purchase agreements
• Representations and warranties, indemnification clauses, caps and survival periods
• Structuring of earn-outs, holdbacks and escrow accounts
• Non-compete and non-solicitation covenants
• Post-closing shareholders’ agreements and transition-period governance
• Merger filings with CADE, the Brazilian antitrust authority, when the thresholds of Art. 88 of Law No. 12,529/2011 are met
• Conditions precedent, closing and post-closing price adjustments
• Acquisition of assets and isolated productive units (UPIs) in insolvency scenarios
• Post-closing disputes: indemnification, price adjustment and earn-out litigation

Related practice areas

Corporate Law and Commercial Contracts · Tax Law · Arbitration and Litigation · Judicial Reorganization and Bankruptcy

To discuss a specific matter, please get in touch and schedule a consultation.