Insight - The Latin American corporate lawyer facing the structuring of M&A transactions

Challenges and opportunities "post-pandemic"

We are pleased to share with you, on this occasion, a series of reflections related to the challenges and opportunities faced by corporate lawyers in the negotiation and implementation of M&A transactions from Latin America. 

It is worth mentioning that LATIN COUNSEL has taken a leading role in the generation of contents, both training and editorial, for the benefit of its network of contacts, subscribers, clients and networking in general, which currently amounts to more than 75,000 participants and firms in Latin America, the United States and Europe. 

In this regard, it is worth remembering that, during the period 2020/2022, we have organised 6 training events (in remote format) on current issues related to the conclusion of M&A transactions, in which more than 500 lawyers from 12 Latin American jurisdictions have actively participated, and more recently, at the beginning of this year 2023, we have prepared and published, together with 10 leading corporate lawyers in the structuring of this type of transactions in our region, a report that has included their responses to a questionnaire on the prospects for their conclusion for this year.

This "post-pandemic" stage that we are going through leads us to face a series of novelties and trends, with a growing influence on the practice of corporate law in our respective countries of origin. 

In this regard, we cannot fail to consider an increasingly notorious "platanisation" or indispensable adaptation to the applicable "local law" of certain standards, actions, activities, and contents of the documentation governing this type of transactions, originally developed by Anglo-Saxon practice.

On the other hand, and despite the fact that there are still few options for professional training and coaching (on the necessary know-how to act as "local counsels" in this type of commercial transactions), offered by Latin American academia and professional practice, conferences and webinars (both local and international) have become increasingly common in this return to the "world of face-to-face", focused exclusively on the treatment of various aspects in the negotiation and design of M&A transactions.      

Thus, based on the above-mentioned scenario, we share a non-exhaustive detail of the challenges and opportunities for the conclusion of M&A transactions, from the "prism" of the practice of Latin American corporate law. 

Firstly, the Latin American corporate lawyer who decides to specialise in the design and negotiation of an M&A transaction, regardless of the legal interest he/she may represent (seller VS. purchaser), in addition -obviously- to accrediting a solid legal background, needs to have an excellent level of training, which could be provided primarily by the middle and senior management (partners) of the organisation he/she is part of, although this is not exclusive. 

Given the level of internationalisation shown by the leading law firms in different countries in our region, which has not been unaffected by the extra-zone expansion of many Latin American companies over the last decade (known as "Multilatinas"), one of their main assets would lie precisely in a process of training and development of their lawyers, precisely in a process of continuous education and training of their team of lawyers to effectively demonstrate that they have the necessary skills and capabilities to participate in the implementation of an M&A deal, either exclusively local or with the participation of foreign investors (more precisely, from the Common Law). 

On the other hand, there are a series of questions, the answers to which (in many cases, they are still in the process of gestation), should be the pillars on which the projected transaction would be based, added to the particularity that this type of business is not exhausted in a single act, as could be the case of the drafting of a commercial contract, but through the transit through successive stages through which the contractual consent would be formed. 

We refer specifically to the pre-contractual, contractual (which normally takes place between the signing of the contract and the closing of the transaction) and post-contractual stages, respectively.  
Thus, for example, it will be essential to crystallise what the object of the contract is. 

In other words, will the acquisition of shares (shares or quotas) conferring internal legal control over the target company on the buyer, or, alternatively, will the transfer of strategic assets (shares or quotas) conferring internal legal control over the target company take place, or, alternatively, will the transfer of strategic assets (shares or quotas) conferring internal legal control over the target company take place?