Merger and Acquisition Transaction in Singapore

Transaction Planning

Before the offer announcement, the bidder has to assemble its board committees to consider the bid process and the day to day

matters associated with the bids. This will allow the other directors of the board to continue their oversight of the management of

the business. The committees will usually be the CEO, CFO, company secretary, legal advisers, financial advisers, and reporting


The financial adviser and legal advisers will involve in advising on the deal structure, takeover strategies and timing of the bid.

These will include arranging financing for the bid, conducting legal due diligence, drafting the legal documents and setting up any

bid vehicles.

Due Diligence

Due diligence is often divided into legal, financial, tax and accounting due diligence. Due diligence will generally cover the material

information of the target company such as contracts, banking agreements, financial statement, memorandum and articles of

association, and licenses among others. There can be confidentiality, exclusivity and standstill agreements depending on the


Secrecy Before Announcement

Rule 2 of the Takeover Code prescribes that there must be absolute secrecy before an announcement of a bid to prevent the

creation of a false market.

Memorandum of Understanding (MOU)

MOU or letter of intent is not intended to be legally binding. MOU usually indicates the nature of the proposed transaction and

summarizes the key terms. In lieu of the MOU, the parties may use the term sheet as the basis to negotiate the main merger and

acquisition agreement.

Holding Announcement

Ideally, the bid is announced by the bidder and/or the target only when the parties are ready to do so and there is no leakage of

information to the market, no unusual movement in the share price of the bidder or target and there is no rumor or speculation.