Corporate Governance Tips For Mergers & Acquisitions

I. Introduction

This article is prepared for demonstrating the role corporate governance issues play in mergers & acquisitions ("M&A"). The term "corporate governance" can be briefly defined as rules introduced by the articles of association of companies, regulations on representation and binding of a company, and mandatory rules of law, which regulate the day-to-day activities, relations between the shareholders, responsibilities and obligations of the directors as well as the shareholders. A provision in the articles of association of the target company in an M&A transaction may derail the contemplated transaction. Moreover, following completion of the transaction minority or majority shareholders and directors may face difficulties and be restricted in running the operations of the company. For these reasons, it is very important to be able to plan the closing and post-closing corporate governance issues of the target company in an M&A transaction.