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  • The 7 mistakes that jeopardise the continuity of the family business

    Family businesses mix business and family relationships, affection and work. This makes them a special type of company that tends to make mistakes which, although common, can seriously affect the continuity of the family business.

    In this article we review some of the most common ones.

    Treating the company as a family and the family as a company

    All family members must know which hat they are wearing at any given moment. Business families live daily with the risk of forgetting that in the family business the noun and therefore the main concept is «business». «Family» is only its adjective.

    Confusing corporate governance bodies with the family

    During the first and second generation the internal organisation may be simpler, but especially as third generation members enter the company, who no longer have such close family ties with each other, differentiated and specialised governing bodies have to be developed.

    Even then, in the family business the same people often sit on different governing bodies. Bringing in talent from outside the family helps to introduce new points of view and avoid this problem.

    Forgetting that the company is not the family’s current account

    The finances of the company should not be confused with those of the family. The company cannot be the family’s current account, but neither can the family act as a bottomless pit that contributes money indefinitely to the company.

    Failure to differentiate ownership and capacity

    In family businesses, it is advisable to have a training plan for the progressive involvement of the new generations in the management of the company. By creating an environment that favours the imprinting of the entrepreneurial spirit, it is possible to a certain extent to pass on entrepreneurial skills and will. However, total success is not guaranteed.

    Here again we are faced with the obligation to look for external talent to fill the possible gaps in the profiles of the entrepreneurial family. Honesty and self-criticism are indispensable for the survival of the common project.

    Lack of communication within the business family

    There must be no taboos when it comes to communicating about the company. There must be a free, open and empathetic dialogue between the different members of the family, especially with those who do not work directly in the family business. Otherwise, it can lead to the creation of opposing factions.

    The disinterest of the new generations

    Most commonly, the new generations are increasingly educated. This is a great asset for family businesses as long as the dreaded disaffection with the family business does not arise. Let us not forget that the most educated members of the family are also those who have the most options when it comes to choosing where to devote their professional lives.

    To avoid this, it is important to gradually involve young people in the day-to-day running of the company, always respecting their freedom of choice. And above all, we must avoid conveying a message of tiredness, anguish, worries… Being an entrepreneur requires a great effort, but we cannot expect the next generation to face it as a sacrifice.

    Lack of planning

    Every family business is a complex entity with its own characteristics. But at the same time it faces a series of perfectly foreseeable challenges: generational succession, professionalisation of structures, tax planning, etc. At Confianz, we have advised many family businesses in their preparation for challenges that could have put an end to their continuity. That is why we know that good planning in time is the best way to guarantee a long life for the company. Because what is good for the company in the long run is also the best for the family.

  • The international M&A market has already started to recover

    After a difficult few years, the international M&A market has reached a turning point and is starting to show signs of an upturn in activity. This is even announced by giants such as PwC in its recent Global M&A Industry Trends 2024 report.

    Forecasts suggest that M&A is on an upward trajectory and will see a gradual increase in activity as the year progresses. There are three reasons for this:

    • Improving financial markets, driven by slowing inflation and expected interest rate cuts.
    • The demand (and supply) for deals accumulated over the past few years. Today, private equity funds are estimated to have approximately $12 trillion in assets under management, almost double what they had in 2019, before the pandemic. Meanwhile, private equity has almost $4 trillion in liquidity. That is, capital to be invested or returned to end-investors.
    • The strategic need for many companies to adapt and transform their business models. According to PwC’s Global CEO Survey 2024, 60% of CEOs plan to make at least one acquisition in the next three years.

    However, any merger or acquisition will also face difficulties such as the most expensive financing in the last ten years. This will put downward pressure on valuations and force investors to create more value to get the same return as before.

    Moreover, the uncertain macroeconomic and geopolitical landscape will reward those actors and companies that do not feel the pressure and are able to move quickly and accurately in changing environments.

    Sectoral trends 

    There are important differences by sector. On the one hand, in the last months of 2023 and the beginning of 2024 the upturn has already started in the energy, technology, pharmaceutical, aerospace, defence, mining, industrial production, automotive and technology sectors.

    Although evolving more slowly, opportunities already abound in sectors such as retail, real estate and construction, where many companies are still recovering or restructuring. Trailing the most active sectors in 2024 will be the subsectors of AI, semiconductors, electric vehicles, batteries and energy storage, biotechnology and insurance intermediation.

    Finally, sectors such as banking and health care are evolving more slowly and may take longer to recover. Consumer spending will also be affected by the limited purchasing power of middle-income households. However, the widespread need for business transformation should instil optimism among investors.

    A promising start to the year for the international M&A market

    Although January is usually quiet, this first month of 2024 has already seen the announcement of several mega deals worth more than $5 billion, showing an increased willingness to enter into large and complex transactions. Some of the international highlights include Hewlett Packard Enterprise’s $14 billion takeover bid for Juniper Networks, Blackrock’s $12.5 billion bid for Global Infrastructure Partners, the proposed $7.4 billion merger of Chesapeake Energy and Southwestern, and the $6.4 billion joint investment in Vantage Data Centers by DigitalBridge and Silver Lake.

    Both these mega deals and small and medium-sized transactions this year will require creative solutions to address today’s challenges. Confianz’s M&A specialists constantly analyse industry trends to provide our clients with the most appropriate advice for each company and sector.

  • Government approves transposition of the European directive on transparent and predictable working conditions

    The Council of Ministers has approved a few days ago, at the proposal of the Ministry of Labour and Social Economy, the preliminary draft law for the transposition of Directive (EU) 2019/1152 of the European Parliament and of the Council of 20 June 2019 on the introduction of transparent and predictable working conditions in the European Union.

    The new law gives workers a new right to foreseeability, which means knowing in advance the essential working conditions and the criteria on the basis of which they may change. This right is introduced in Article 4 of the Workers’ Statute.

    The obligation to provide written information on working conditions is strengthened

    The employee must know his or her work pattern in advance. To this end, the employer is required to put employment contracts in writing, irrespective of their duration. This also applies to fixed-term contracts of less than four weeks, which until now were exempt from this obligation. In addition, written notification will be compulsory if the essential elements of the employment relationship are changed.

    What are the essential working conditions to be included in contracts

    These are the essential working conditions: the duration of the contract, the length of the working day and its distribution and the length of the probationary period.

    The duration of the contract

    If this mandatory information is not included in the employment contract, the employment contract is presumed to be indefinite and full-time.

    The lenght of the working day

    Any change in the number of hours worked is always voluntary for the employee. The employer may not unilaterally impose, for example, the conversion of a full-time job into a part-time job or vice versa, as well as the increase or reduction of hours in part-time work.

    In the case of agreed additional hours, they must be announced at least three days in advance. This period may not be reduced by agreement. If these additional hours are cancelled without respecting this three-day period, the workers shall be entitled to receive the corresponding remuneration.

    When a vacancy arises, any employee with at least six months’ seniority in the company is entitled to apply. In this way, priority will be given to existing staff when it comes to accessing better conditions, such as full-time working hours, longer working hours, permanent contracts, etc. The company must issue a reasoned written reply within 15 days or within a maximum of three months if the company has fewer than ten employees or one month if there are more than ten employees.

    The probationary period

    The trial period in the case of permanent contracts is limited to a maximum of six months for qualified technicians and two months for other workers. This time limit may not be extended in the collective bargaining agreement.

    In the case of temporary and fixed-term contracts, if the contract is concluded for a period of six months or more, the probationary period may not exceed one month. In the case of shorter contracts, the probationary period shall be calculated in the same proportion.

    Protection of moonlighting

    Undertakings may not hinder moonlighting. They may not prohibit it, restrict it or treat any worker unfavourably on the grounds that he or she provides services to other companies.

    Any restrictions will have to be well justified on objective grounds such as respect for business confidentiality or the avoidance of conflicts of interest, among other issues.

    In recent times, new developments in the field of labour law are constantly taking place and companies are finding it very difficult to keep up with all the changes. For this reason, it is increasingly essential to have a good employment consultancy such as Confianz, made up of professionals who are specialists in this branch of law.

  • What are takeover bids, the big players in the first half of 2024

    At the beginning of this year we are experiencing a great proliferation of takeover bids both in Spain and in the rest of the world. In recent weeks we have witnessed the takeover war for Applus, the Hungarian group DJJ’s preparation of a takeover bid for Talgo and rumours of a possible takeover bid for the pharmaceutical company Grífols, but the trend is generalised. And everything points to these types of operations being the main protagonists for at least the first half of 2024.

    What is a takeover bid

    A takeover bid is a stock market transaction whereby a person or entity makes an offer to buy all or part of the shares of a company at a specified price.

    Advantages

    For the acquirer, the objective of a takeover bid is to acquire many shares of a company in a quick and organised manner, at a fixed and more advantageous price. Because a large acquisition of shares through a large number of ordinary stock exchange transactions would cause the market to detect a continuous increase in demand and the price per share would gradually rise.

    Shareholders who participate in the offer and sell their shares also benefit because the price offered in a takeover bid is usually 10-20% higher than the market price at the time.

    How to make a takeover bid: the prospectus

    The entity or person making the takeover bid has to submit a prospectus containing all relevant information:

    • Target values
    • Cash or non-cash consideration
    • Expenditure
    • Deadlines
    • Conditions and purpose of the operation
    • Acceptance and settlement procedures
    • Etc.

    This prospectus of the takeover bid must be approved by the National Securities Market Commission (CNMV) and is freely available for consultation.

    Operation

    In the event of a takeover bid, the shareholders of the target company can always choose whether or not to participate in the bid.

    Partial takeover bids

    In the case of takeover bids that do not reach 100% of the shares, three situations may arise:

    • If the number of acceptances exceeds the minimum required, the shares are sold to the company that made the takeover bid.
    • In the event that acceptances exceed the maximum requested, the price is prorated.
    • If they do not reach the minimum, the acquirer can cancel the takeover bid.

    Total takeover bids

    In the case of takeover bids for 100% of the shares, if at the end of the period 90% or more of the shares have accepted the bid:

    • The offeror can demand a sell-out from shareholders who have not taken part in the takeover bid.
    • Any shareholder may require the offeror to buy his shares from him at the offer price (squezze out).

    Types of takeover bids

    Depending on the attitude of the board of directors of the target company, we can find a hostile takeover bid, when it does not agree with the operation, or a friendly takeover bid, when it is in favour and has reached an agreement with the bidder.

    There are also competing takeover bids, where a second bidder makes a bid for securities that are already subject to a takeover bid and the acceptance period has not yet expired.

    When is it mandatory to launch a full takeover bid

    A takeover bid for 100% of the shares is mandatory in the following cases:

    • When there is a takeover (acquisition) of more than 30% of a listed company.
    • If a company decides to delist.
    • In the case of a capital reduction, because it is a significant amendment to the articles of association.

    In all cases it is essential to have legal and financial advice on corporate matters in order to negotiate with all the guarantees.

  • Which companies can claim back part of their corporate income tax

    The Constitutional Court has just declared unconstitutional the modification of the Corporate Tax approved in 2016. And this decision opens the door to million-dollar claims by companies.

    It should be borne in mind that the Treasury put the increase in tax revenue resulting from this modification, which has now been overturned, at 4.5 billion euros. Globalia alone suffered an additional 4.7 million euros in its first year of application. It is estimated that, in total, the Tax Agency is facing refunds of between 2 and 3 billion euros.

    Because not all affected companies will now be able to apply for compensation. Only those that have kept the procedure open until now will be able to do so. A further demonstration that having a specialised tax consultancy can make a big difference.

    Not all affected companies can claim

    The Constitutional Court’s ruling imposes certain limits on companies’ claims. Tax obligations that have already been decided by a judgment or administrative ruling or that have not been challenged at the date of the ruling, or self-assessments whose rectification has not been requested at that date, may not be reviewed.

    As we said, only the affected companies that have kept the proceedings open will now be able to request compensation. And even in open proceedings, the court decision will only affect the last four financial years unless the company has interrupted the statute of limitations.

    In any case, most large companies have open proceedings, so they will be able to complain.

    What was the modification of corporate taxation

    The reform of the Corporate Income Tax that has now been declared unconstitutional was approved in 2016 by means of a Decree-Law by the Ministry of Finance then headed by Cristóbal Montoro. The aim was to limit the deductions from which large corporations benefited, but without modifying the nominal rates of 25%. The ultimate aim was to increase revenue in order to bring Spain closer to the public deficit reduction targets required by the European Union.

    Three changes were made so that large companies in particular would have a larger tax base on which to apply the tax rate. These are the changes introduced by the Royal Decree-Law:

    • It set more severe ceilings for the offsetting of tax losses for companies with a turnover of more than 20 million euros;
    • It introduced a limit on the application of double taxation deductions;
    • It made it compulsory to automatically include in the tax base any impairment of the value of tax-deductible holdings by fifths over five years.

    The first two measures were only applicable to large companies, while the third one could affect any taxable person liable to this tax.

    Why has it been declared unconstitutional

    Following the approval of this reform, large companies began a legal battle. The National High Court raised a question of unconstitutionality and now the Constitutional Court has ruled that the approval of these measures through the royal decree-law violated article 86.1 of the Constitution.

    According to the Constitutional Court, the royal decree-law cannot «affect the rights, duties and freedoms of citizens». According to established doctrine, this instrument is reserved for cases of urgent necessity and cannot alter either the general system or those essential elements of taxes that affect the determination of the tax burden, such as corporate income tax, which is a basic tax.

    The regulation declared unconstitutional has been amended since its entry into force in 2017 and is therefore not currently being applied.

  • ‘s new for business

    The last few years have seen a large number of legislative developments in the field of employment law, and 2024 looks set to continue to add new legal obligations for companies. In this article we will review some of the latest laws that have come into force and others that are about to come into force.

    At Confianz Employment Law Department we keep our clients permanently updated on existing or developing procedures and duties to enable them to have a strategy that anticipates changes, eliminates the risk of sanction and protects the company’s reputation.

    New rules that entered into force in 2023

    Implementing an internal complaints channel

    For companies with 50 employees or more, it is mandatory as of 1 December 2023 to have an internal whistleblower channel in place to enable employees to report breaches of the law in the professional field.

    Leave to reconcile work and familiy life

    Royal Decree-Law 5/2023 of 28 June introduced a package of reforms directly affecting work-life balance. It extended the adaptation of the working day, marriage leave for unmarried couples, paid leave from 2 to 5 days for carers, the new right to take four days paid leave from work due to force majeure, eight weeks’ parental leave to care for a child for more than one year, and the cases of objective nullity of dismissals when there is unfavourable treatment for exercising the rights to work-life balance or co-responsibility.

    Breastfeeding leave of up to 28 days 

    From 21 December 2023 it will be possible to take up to 28 days of cumulative breastfeeding leave.

    Changes coming into force in 2024

    Minimum wage increase 

    In 2024, the minimum wage will rise by 5% to 1,134 euros in 14 annual payments. This increase has already been approved a few weeks into the year 2024, but it will be applied retroactively as of 1 January.

    Intergenerational Equity Mechanism contribution rises

    From January 2024 the SS contribution rate for the International Equity Mechanism increases from 0.6% to 0.7%. The company pays 0.58%, while the worker pays the remaining 0.12%. This rate will continue to rise by 0.1% until 2029, when it will reach 1.2%.

    It is compulsory to register all trainees with the social security system

    Since 1 January, it has also been compulsory to register and pay social security contributions for all trainees. Even if their internships are unpaid. The company is entitled to a 95% reduction for common contingencies.

    Mandatory LGTBI harrassment protocol

    From 2 March it will be compulsory for all companies with more than 50 employees to have a protocol for dealing with harassment or violence against LGTBI people.

    Labour law developments announced for 2024

    Reduction of working hours

    Among the changes in labour regulations announced by the government for this year, the reduction of the maximum working week from 40 to 38.5 hours without a reduction in salary stands out for its significance.

    New statue for trainees

    The Ministry of Labour has announced that it will reopen the dialogue on the statute for trainees. This regulation aims to restrict the hours of internships according to their type, to compensate at least the costs of transport and meals, and to limit the presence of interns to 20% of the workforce per work centre.

    In addition to these expected changes, we will have to keep an eye on the developments that are sure to take place in labour law in 2024.

  • Only one in eight Spanish family businesses has a succession plan

    Intergenerational succession is one of the greatest challenges facing family businesses. This is recognised by them individually and through organisations such as the Family Business Institute (IEF) and the Territorial Associations of Family Businesses. They all agree that succession should be one of the fundamental parts of the family protocol for planning and managing the continuity of the company.

    Despite this widespread recognition of the importance of structuring succession in advance, the latest Sigma 2 survey conducted among Spanish family businesses shows that while 55% of the 851 companies belonging to the IEF network and territorial associations have a family protocol and/or succession plan, only 16% of the 2,390 non-member family businesses surveyed have a family protocol and only 12% have a succession plan. As far as the family council is concerned, 50% of member companies have a family council for decision-making, while only 26% of external companies have a family council.

    More and more family businesses are organising their generational succession

    However, these percentages show a significant improvement in recent years. The 2015 Family Business study showed that only 8.9% of family businesses had a family protocol, while in the 2018 Family Business Competitiveness Factors report the percentage was 11.3%.

    The family protocol 

    With regard to succession planning, the Instituto de la Empresa Familiar and the Territorial Associations of Family Businesses have promoted the use of the family protocol among their members with the objectives of:

    • Define the access of family members to the management of the company;
    • It regulates the relationship between the family and the company;
    • Provide for the succession of the founders and the different generations to ensure the continuity of the company.

    In addition, the family protocol is a document that makes it possible to articulate the organisation of the family business at multiple levels. For example, it creates the family assembly and the family council, determines the information to be provided to the family groups, defines interlocutors at family group level with the managers, outlines dividend and financing policies in relation to the family members or creates internal self-financing funds for specific situations.

    The succession plan

    Succession planning, on the other hand, focuses exclusively on achieving an orderly generational transition within the business family. This involves many issues:

    • Specify the requirements to be met by the successor, such as belonging to the family, experience, training, etc.
    • Establish the process for preparing the successor;
    • Specify the responsibilities of the outgoing leader;
    • Regulating investor relations;
    • Etc.

    Not having a succession plan can lead to the end of a family business 

    Family businesses are increasingly aware of the importance of providing for an orderly generational handover not only at the top of the company, but also in all key positions. In practice, having a succession plan or not having one and opting for a standard will, for example, can make the difference between the company surviving from generation to generation or dying out with the retirement of its founder. This is undoubtedly one of the reasons why barely 30% of family businesses are passed on to the second generation.

  • Challenges for the corporate legal sector in 2024

    2024 promises to be another year full of uncertainties for companies from a legal standpoint. In addition to the economic and geopolitical changes in Spain, there will be a reactivation of legislative activity, which was paralysed for part of 2023 due to the general elections.

    These are the main challenges facing businesses in 2024.

    More M&A transactions 

    Gradual growth is expected in the mergers and acquisitions sector, because both domestic companies and international private equity funds have the appetite and capacity to invest. Inflation is taking a breather and the Spanish transactional market reflects solidity and dynamism and the capacity to attract foreign investment and generate growth opportunities.

    We will see major corporate restructuring operations, especially in the energy and digital infrastructure technology sectors, which will be the drivers of the economy. New legislative initiatives at European level for the reform of the electricity market, the renewable energy, gas and hydrogen regimes will give rise to new investment opportunities.

    Real estate transactions and IPOs to grow

    Commercial will be a particularly active area in 2024. Real estate transactions and the upturn in the IPO market will stand out in this area. In no other European country is there currently a waiting list of companies thinking of going public like the one that is forming in Spain. Some of the companies facing this challenge in 2024 are Puig, Cirsa, Volotea, OK Mobility…

    New tax obligations for large corporate groups

    In 2024, large corporate groups will face numerous tax challenges, adapting to new tax obligations such as international minimum taxation or country-by-country reporting.

    Major changes in labour law

    At the company level, there is concern about the possible reduction of the normal working week to 37.5 hours per week without any reduction in wages.

    Other high-impact reforms will be those affecting trade union representation in management bodies, the increase in the maximum ceiling for social security contribution bases, new work permits and the structure of collective bargaining. Labour law is set to undergo major changes in 2024 and companies will require expert legal advice in this area.

    More regulation in almost all areas

    In general, the increase in the regulatory burden in Spain and Europe will continue in new and not so new areas such as data protection, ESG, technology, compliance, cyber risks, health, intellectual property, digital business, renewable energies and tourism. European regulation on AI is expected this year. In addition, new developments such as the Digital Services Act or the new sustainability reporting will start to be implemented this year.

    In 2024, legal changes for companies will accelerate. Both at EU level and in Spain, where decree laws will proliferate.

    Businesses will need legal advice to comply with changing regulations

    In short, this is going to be a year of many changes in the regulations affecting companies in all areas of law. Especially the new developments and uncertainty in tax and labour law are already creating concern and doubts among entrepreneurs.

    In an ever-changing regulatory environment, companies will need increasingly sophisticated legal services. That is why at Confianz we give our clients the ability to anticipate change with flexible, tailor-made solutions that are appropriate to their business and sector.

  • Defective Product Directive will update liability rules for companies

    The Council and the European Parliament reached agreement on the Defective Product Directive on 14 December. It will update EU rules to adapt them to the reality of new technologies, digital products and the circular economy.

    The new directive will update the current civil liability regulation, which dates back four decades. The aim is to provide better protection for consumers and greater legal certainty for businesses. For example, the liability directive extends the definition of «product» to files and digitally manufactured software. But it leaves out free and open source software that is developed or supplied outside the course of a commercial activity.

    Compensation for defective products

    The Product Liability Directive, also known as the Product Liability Directive, ensures that if a person suffers damage caused by a product they can claim compensation from the manufacturer or the company that placed the product on the single market.

    This compensation shall cover material and non-material losses resulting from the damage, in so far as they are compensable under national law.

    Controversy over the burden of proof

    One of the aims of the Directive is to ensure that consumers have a real possibility to obtain compensation. In view of the increasing technical complexity of many products, Member States should ensure that the injured party can request access to the relevant evidence available to the manufacturer in order to prove his claim.

    Even so, there is a last way out when a plaintiff encounters excessive difficulties in proving the defectiveness of the product or the causal link between the defectiveness of the product and the damage. For the court may decide that the plaintiff is only required to prove the likelihood that the product is defective or that the defect caused the damage.

    This point has raised concerns among European companies in different sectors. Some warn in a joint communiqué that this directive could open the door to a litigation culture in Europe and hinder investment in innovation. According to the text: «A cornerstone of the current directive is that the claimant must prove the damage, the defect and the causal link between the two. This is a vital part of our European civil justice system. We are deeply concerned about the broad exceptions to this concept linked to undefined terms, which de facto lead to a reversal of the burden of proof. The scope of mitigation must be significantly reduced, and it must be made clear what claimants must do and prove before any liability can be presumed».

    Online marketplaces

    Internet platforms or marketplaces can also be held liable for a defective product if they present it or allow the transaction for sale. If the average consumer can believe that it is the platform itself or a trader under its authority or control that provides the product, it can be held liable for the defective product.

    Circular economy

    The new directive also takes into account the particularities of the circular economy. Products are increasingly reused, repaired and upgraded throughout their life cycle. Thus, when a product is substantially modified beyond the control of the original manufacturer and placed on the market or put back into service, the new directive stipulates that the company that carried out the modification must be held liable as the manufacturer of the final product.

    Importers

    The directive also provides that products or components from manufacturers located outside the Union must offer the same level of protection. In this case the importer, the manufacturer’s authorised representative or, as a last resort, the compliance service provider may be held liable.

    At Confianz we remain attentive to the final drafting of the Defective Product Directive and its transposition into Spanish law. Because our aim is always to offer our clients the best advice.

  • How to deal with the sale of your company

    The reasons for selling a company can be many. Some entrepreneurs do so because they cannot find a successor in their own family. In other cases, it is the heirs who decide to get rid of the family business. Unless we are talking about serial entrepreneurs who specialise in growing companies and selling them when they reach a certain size, the sale of a company is usually a special moment in the life of an entrepreneur. And in many cases they are not familiar with M&A processes.

    No two cases are identical. But over our decades of experience advising on mergers and acquisitions, we have identified the most common mistakes entrepreneurs make when faced with the sale of their business. In this article we outline some tips on how to avoid them.

    1. Be clear about the objective of the sale and be realistic

    Before starting a sales process, it is important to clearly define the objectives. And these need not only be financial. Many entrepreneurs also prioritise finding a buyer who fits in with their business philosophy and who wants to be involved in the long-term development of the company.

    At the same time, it is important to be aware that negotiation is part of the process and it will certainly be necessary to compromise on some aspects: earn outs, partnership agreements, guarantees, etc.

    2. Develop a good business plan

    It may be a counter-intuitive idea because at the end of the day the ultimate goal is to sell the business. However, having developed a Business Plan and being able to explain it clearly and coherently will be a key factor in seducing potential buyers. You must be prepared to answer many questions and provide financial information in an orderly fashion to gain the confidence of the investor.

    3. Don’t neglect the business and prepare it for the day after

    Throughout the negotiation process, the company should continue with its normal day-to-day business, without making radical strategic decisions. If, for example, new investments in fixed assets are unavoidable, it is advisable to discuss them first with the potential new owners.

    However, it is also necessary to prepare the company for the day after, when we are no longer in charge. In order to avoid a break in the continuity of the business, a transition period is often agreed so that the entrepreneur in management functions remains in management for a couple of years.

    4. Be careful about confidentiality, but be frank

    An M&A process can be a vulnerable time for the company if the timing of communication to employees, customers, suppliers and even competitors is not well managed. It is a difficult balancing act between transparency with potential buyers and strict confidentiality with external parties.

    5. Having the best sales advisors

    It is advisable for the entrepreneur to avoid the wear and tear of being in the front line of the negotiation. In addition, having tax advice at this critical time can lead to significant tax savings.

    Even the valuation of the company itself depends on many factors, all of which need to be taken into account: the economic situation, industry trends, size, margins, etc.

    M&A is a highly complex and constantly changing industry. For this reason, it is necessary to have the advice of true specialists. Professionals such as the Confianz team, which has been helping companies to successfully complete their mergers and acquisitions, negotiating and drafting transaction agreements for years.