December 3, 2015 | Houston, Texas Managing the Challenging Aspects of a Cross-Border M&A Transaction Speakers: Jonathan B. Newton and William D. Davis II December 3, 2015 | Houston, Texas

How to Approach a Cross-Border M&A Deal Planning, Timing and Structuring Pre-signing Phase Diligence Phase Negotiation and Documentation Phase Closing and Post-Closing Phase Compliance and Regulatory US Imposed Local – Compliance/Regulatory Local – Liabilities Post-Transaction Matters Challenges in Enforcing Your Agreement Post-Acquisition Integration PAI Considerations Q&A

Planning, Timing and Structuring

Phases to Your Cross-Border Transactions Phase 1: Pre-Signing Phase 2: Diligence Phase 3: Negotiate/ Document Phase 4: Closing and Post-Closing

Pre-Signing Phase – What are We Trying to Accomplish What level of detail in LOI is too much? Identify key approvals and local closing requirements Consider cultural, legal, time zone and related issues Review structure to minimize applicable taxes Are you managing your side or the other side or both? Establishing/negotiating precedent in the pre-contract phase Have you assembled the right team?

Diligence Phase Risk assessments Determine goals Identify key issues and determine how to present results Scope, budget and timing change if structure/terms change Preparing the other side for intrusive diligence Not all parties have experience with intrusive due diligence Cultural and national feelings may need to be managed Confirm choice and enforceability of remedies for breached reps and warranties Indemnity, escrow, insurance, etc. To what degree are remedies practically achievable

Negotiation and Documentation Phase Controlling the drafting of the documents is only first step US style drafting v. European (or other) approach – regardless, “must haves” need to be included List of ancillary agreements What does local law require? Consider umbrella agreement with local transfer documents Translations?

Closing and Post-Closing Phase What challenges? One or multiple closings “Chicken & Egg” issues Wiring/Currency issues Enforceability concerns Consider delayed closing for certain jurisdictions If banks involved, keep in mind KYC requirements Are there any post-closing filings/registrations required? Post-Acquisition Integration

Compliance and Regulatory

Layers of Compliance/Regulatory Concerns Layer 1: US Imposed FCPA Anti-money laundering Anti-terrorist related Trade Sanctions Layer 2: Local – Compliance / Regulatory Foreign investment restrictions or approvals Exchange controls/restrictions Corporate regulatory compliance Foreign anti-bribery/compliance laws Layer 3: Local - Liabilities Employment Tax Regulatory Third-party claims

Post-Transaction Matters

Challenges in Enforcing Your Agreement Preparing for disputes and your dispute resolution mechanism Litigation or arbitration? In the US or in a foreign country? Choice of Law Added complexity to post-closing money fights Earn-outs and deferred payments Net Debt adjustments Indemnity clauses Speaker details……………

Post-Acquisition Integration What is it and what disciplines are involved? Tax-driven? Should always consider elimination/consolidation of entities More challenging when many countries involved What are the essentials to a successful integration? Planning begins before Day 1 Planning includes all stakeholders Planning includes detailed step plan with real timelines Communicate interim guidelines Take into account the target’s culture Organized & cohesive multi-disciplinary team What policies should you roll-out as part of the integration? Ethical guidelines – FCPA, Anti-Money Laundering, Anti-Terrorism Employee handbooks Environment/human rights policies Speaker details……………

PAI Considerations Each discipline has a different view of what should be top of mind, underscoring the importance of coordinating and aligning the various stakeholders.

Q&A

Contact Information Jonathan B. Newton William D. Davis II Partner, Houston +1 713 427 5018 jonathan.newton@bakermckenzie.com Partner, Houston +1 713 427 5078 william.davisII@bakermckenzie.com