Mergers and acquisitions
KBM assists both Swedish and international companies with all types of mergers and acquisitions. This may take the form of mergers, takeovers, due diligence or restructuring. We have a comprehensive Swedish and international network and are therefore able to work to extremely tight deadlines.
KBM can provide vital support to owners and boards of directors, not only because mergers and acquisitions make enormous demands on specialist legal skills but also because experience has furnished us with a wealth of experience in negotiations and project management. We can also call on a wide range of legal expertise and an extensive network of contacts, making us your secure partner in all areas of mergers and acquisitions, whether in contract, labour, company, competition or property law. We give innovative advice and are also able to unburden you of those resource-draining tasks that large acquisitions inevitably involve.
Price and payment. If the seller cannot reach a negotiated agreement on a cash payment, he/she should demand adequate security for the part of the price to be paid after transfer.
Information to the buyer. The seller should ensure that the buyer is provided with as much information as possible. The contract should state what information the purchaser has been given so that the buyer cannot be accused of withholding information or of having provided incorrect information.
Warranties. Of course, the seller would prefer to give no warranties at all. However, the seller should remember that the error provisions in Sales Law apply if the liability for errors is not regulated in the contract. The seller is usually obliged to provide at least an accounts warranty, i.e. a warranty that the most recent accounts were drawn up in accordance with the provisions of the Annual Account Act (årsredovisningslagen). Ideally, the seller should avoid guarantees for conditions that the seller does not know about.
Warranty and complaints. If no warranty period is mentioned, a two-year period of limitation applies under Sales Law. The seller must request a significantly shorter warranty period and that the buyer must give notice of faults or shortcomings within a short period after having discovered them.
Full transparency. The buyer should have full transparency in the company from the contract date until the date of transfer.
Price and payment. The buyer should often require that the purchase price is made dependent on the future results, called additional consideration. The buyer should always ensure that a certain portion of the purchase price is paid after the transfer of the shares or is deposited into a separate bank account (called an escrow account.) This allows the buyer to offset the remaining purchase price against claims due to errors or shortcomings that are discovered after the transfer.
Provision of share certificate. The buyer should always ensure that a share certificate is provided at the time of transfer.
Warranties. The buyer should demand warranties related to the balance sheet and the profit and loss account. In particular, if the purchase price is based on a valuation of returns, the seller should provide a warranty for historical results but often also for the results in the current financial year. The buyer should ensure that the contract contains a comprehensive list of warranties. The buyer should be aware that any shortcomings in the warranties that the buyer knew about in general cannot be invoked against the seller. The buyer should therefore specify carefully in the contract all the information that the buyer has knowledge of.
Warranty period and claims. The warranty period should be at least one year from the date of transfer. If the contract does not specify a period, a two-year warranty period applies under the Sales Act (köplagen). The buyer should ensure that claims are not required to be made immediately after the errors or shortcomings have been discovered.
Non-compete and confidentiality clauses. The buyer should ensure that the seller is bound by non-compete and confidentiality clauses for one or several years after the purchase has been completed.