Global Private M&A Guide 2020

"Global Private M&A Guide 2020", published by Baker McKenzie, is a comprehensive legal guide offering strategic insights into private mergers and acquisitions across more than 40 jurisdictions worldwide. Designed for legal professionals, investors, and business executives, the guide breaks down complex M&A regulations, helping stakeholders navigate transactions in a globalized and competitive market.

This publication is backed by Baker McKenzie's extensive international legal network, combining local expertise with global perspectives to deliver high-quality legal analysis and comparative frameworks for cross-border M&A.

What are the key private M&A deal structures?

As in other jurisdictions, the acquisition of a business in Hong Kong may be structured either as a sale of shares or as a sale ofassets (or a combination ofthe two). Particularly,the buyer maypurchase the shares in the company operatingthe business from its shareholders or purchase the assets ofthe business directly from that company.

Auction processes arequite common in Hong Kong. They often involve a two-stage bid process, using non-binding bid letters at the indicative offer stage and binding bid letters at the final offer stage.

Broadly defined, a merger involves the absorption of one company (that ceases to exist) into another that retains its ownidentityand acquires the assets and liabilities ofthe former. HongKong provides for a simple, court-free amalgamation procedure for effecting the merger of Hong Kong companies as long as the companies aresister companies or parents-subsidiaries and the statutory requirements can be satisfied. Complex amalgamations may be effected through a court-sanctioned schemeof arrangement, though this is rarely used in practice. The court-free amalgamation procedure was introduced in March 2014 and the authorities have since provided guidance on the treatment of key elements, such as taxand employees. Where the legal position is unclear(e.g., whether employees transfer automatically), a more conservative approach is recommended. The economic results of a merger can also be achievedthrough:
− transfer of one company's business assets to another company, followedby liquidation or disposal of the transferor company;
− establishmentofa new company that acquires the assets oftwo or more entities,which,following the transfer of assets, are liquidated or disposed of; or
− transfer of one company's (Company A) shares toanother company(Company B), followedby liquidation of Company A and distribution of its assets in their present form to CompanyB.

Which entity is likely to be the target company (on a share sale) or the seller (on an assetsale)?

The most commonly used private company is a company limited by shares incorporated in Hong Kong underthe Companies Ordinance (Chapter 622 of the Laws of Hong Kong). A company formed under Hong Kong law may be either limited, byshares or by guarantee, or unlimited.A companylimited by shares can be either public or private. The usual form of a subsidiary company is a company limited by shares. If a company is limited by shares, the liability of its members (the term for "shareholders") is limited to the amount, if any, unpaid on their shares. Such a companycan be formed quicklyand requires little formality. Certain restrictions are imposedon a private company. Its articles ofassociation must contain a restriction on the right of members to transfer their shares, limit the number of members to 50 (exclusive of any member whois a current or past employee) and prohibit invitations to the public to subscribe forthe shares or debentures ofthe company. However, a privatecompany may be convertedinto a public company at any time by removing these restrictions from its articles of association.

Who Should Read This Guide?

This publication is highly recommended for:

- Private equity funds and international investors pursuing cross-border acquisitions

- Corporate legal counsels and M&A advisory teams

- Lawyers and consultants specializing in global M&A transactions

- Banks, investment firms, and financial institutions involved in deal financing

- Students and academics in international business law or commercial transactions

Benefits of Using the Guide

✅ Quickly access legal insights from 40+ countries
✅ Simplify cross-border due diligence and compliance planning
✅ Improve risk management and deal execution strategies
✅ Stay ahead of M&A regulatory developments and global trends

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