Aquila Capital Group

Until recently, a corporate merger has been a rare enough occurrence in the Russian business. It should be mainly explained by the fact that in such deals, mutual trust and understanding between the partners is required – exactly what was lacking in the days of emergence of the Russian capitalism. Another important factor was the immaturity of the Russian laws regulating both the merger procedures and post-completion shareholder relationships.

In the past 5-7 years, both the Russian regulatory system and corporate culture of Russian companies have significantly improved. Today, the top management and shareholders of Russian companies take care of the continuing growth of business capitalization rather than annual revenues from the business activity. As a consequence, the shareholders now consider mergers as an alternative strategy of business development.

Corporate merger is the most sophisticated deal type, both in terms of completion procedures and post-completion fusion of different corporate cultures aimed at creation of a truly unified business. In the course of the merger, the parties have to address a wide range of key issues, including approval of:

• development strategy of the unified company and estimated potential synergic effect for each party;
• valuation of the merging companies necessary to calculate the share swap ratio;
• transaction structure: the deal may be structured as combination (merger of two companies resulting in the creation of a new unified company) or accession (merger of company A into company B resulting in the creation of the unified company on the basis of company B). Combination and accession may be implemented at either operating or holding level of corporate organizational structure;
• top management of the unified company;
• rules and procedures for post-completion shareholder relationship.

Aquila Capital Group employees efficiently assist our clients in resolving these and many other issues arising in the course of the corporate merger. Successfully completed mergers have allowed us to accumulate significant experience which we can dedicate to our clients in the new projects.