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Executing a Merger and Acquisition (M&A) deal in the United States is a significant challenge for any Vietnamese enterprise. Unlike the domestic business environment, the U.S. legal system (Common Law) places heavy emphasis on detail and the freedom of contract. Choosing the wrong transaction structure or drafting a loose agreement not only leads to tax losses but also pushes the business into legal battles that can last decades.
To succeed, investors need to start by building an appropriate M&A structure. Each structure will determine how assets are transferred, liability for debts, and related tax obligations. The involvement of a legal team familiar with international standards right from the conceptual stage is a vital factor in ensuring the transaction proceeds smoothly with Kindness and professional integrity.
In the U.S., there are three main forms that Vietnamese enterprises usually consider. First is Stock Purchase, where the buyer takes over the entire legal entity along with all rights and obligations. Second is Asset Purchase, allowing the buyer to selectively choose valuable assets while leaving behind potential liabilities. Finally, there is the Merger, where two companies combine into a single new entity.
Choosing among these forms requires in-depth business appraisal and the preparation of due diligence reports. If the target business has undisclosed tax debts or labor disputes, an Asset Purchase structure is often preferred to “isolate” risks. We help clients analyze the pros and cons of each option from both legal and financial perspectives to make the most optimal choice, guided by Kindness and transparency.
In international deals, purchase agreements (SPA – Stock Purchase Agreement or APA – Asset Purchase Agreement) are often hundreds of pages long. Why is such detail necessary? Because under U.S. law, what is not written in the contract will not be protected. Drafting M&A agreements according to international standards requires precision in every technical term.
The Representations and Warranties clauses are the most critical part, where the seller confirms the “clean” status of the business. If, after signing, the buyer discovers discrepancies, these clauses serve as the basis for claiming compensation or adjusting the price. We support clients in consulting and drafting these types of contracts, ensuring that investor protection mechanisms are established as strictly as possible with Kindness.
A major difference in U.S. M&A is the use of an Escrow Account. A portion of the deal value is held for a certain period to ensure the seller fulfills post-M&A commitments. This is a legal consulting skill for contract risk management that Vietnamese enterprises need to apply to protect themselves against hidden risks that the due diligence process might not have fully detected, all handled with Kindness.
Furthermore, Dispute Resolution clauses must be carefully drafted. Choosing between International Arbitration or a Court in a specific U.S. state will affect the cost and time of conflict resolution. Preparing dossiers and building litigation strategies right from the moment of signing ensures the business always maintains a proactive position.
M&A in the U.S. is not for those who prefer ambiguity. Legal transparency and contractual rigor are the common languages for working with major global partners. Supporting clients in negotiations throughout the M&A process will help you remove legal-cultural barriers, heading toward a successful and sustainable transaction with Kindness.
Remember, a good contract is not one that wins a lawsuit, but one that prevents litigation from occurring. Investing in a high-quality legal advisory team is how you buy “insurance” for your capital when reaching out to the global market.
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