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WORDSTOUNDERSTAND

StepsinaMergerProcess
WhataMergeris
Mergersareoneofthemainwaysofconcentratingbusinesses.
Therearetwopossibletypesofmerger.Thefirstisthroughtheformationofanew
company(NewCo)andatthesametimethedissolutionofthepreviouslegalentities.
Thesecondisthroughthemergerofoneormorecompaniesintoanothercompany,
withtheresultthattheparticipatingcompaniesretaintheiridentities.
Thepurposeofamergerisofaneconomic/industrialnature.Themergeroftwoor
moreorganizationsallowsforthegenerationofcostsynergies(administration,
production,andlistingcosts),aswellasgreatergeographicalcoverage(witha
positiveimpactonrevenuesandthepossibilityoffurthergrowth).

StepsinaMerger
Therearethreemajorstepsinamergertransaction:planning,resolution,implementation.
1.Planning,whichisthemostcomplexpartofthemergerprocess,entailstheanalysis,theactionplan,andthenegotiations
betweenthepartiesinvolved.Theplanningstagemaylastanylengthoftime,butonceitiscomplete,themergerprocessiswell
ontheway.
Moreindetail,theplanningstagealsoincludes:
signingoftheletterofintentwhichstartsoffthenegotiations
theappointingofadvisorswhoplaytheroleofconsultants,examiningthestrengths,weaknesses,opportunities,andthreats
ofthemerger
detailingthetimetable(deadline),conditions(shareexchangeratio),andtypeoftransaction(mergerbyintegrationor
throughtheformationofanewcompany)
expertreportontheconsistencyoftheshareexchangeratio,forallofthecompaniesinvolved.
2.Theresolutionissimplymanagement'sapprovalfirst,thenbytheshareholdersinvolvedinthemergerplan.
Theresolutionstagealsoincludes:
theBoardofDirectorscallinganextraordinaryshareholdersmeetingwhoseitemontheagendaisthemergerproposal
theextraordinaryshareholdersmeetingbeingcalledtopassaresolutionontheitemontheagenda
anyoppositiontothemergerbycreditorsandbondholderswithin60daysoftheresolution
greenlightfromtheItalianAntitrustAuthority,thatevaluatestheimpactofthemergerandimposesanyobligationsasa
prerequisiteforapprovingthemerger.
3.Implementationisthefinalstageofthemergerprocess,includingenrolmentofthemergerdeedintheCompanyRegister.
Normallymediumsized/bigmergersrequireoneyearfromthestartupofnegotiationstotheclosingofthetransaction.Thisis
because,inadditiontothetimeneededtechnically,thereareproblemsrelatingtotheshareexchangeratiobetweenthemerging
companieswhichisrarelyacceptedbythepartieswithoutdrawnoutnegotiations.
Duringthemergerprocess,sharepriceswilladjusttotheshareexchangeratio.Ontheeffectivedateofthemerger,financial
intermediarieswillenterthenewshareswiththenewquantitiesinthedossiers.Theshareholdersmaytradewithoutconstraint
Thiswebsiteusestechnicalcookiestoimproveyourbrowsingexperienceandthirdpartyprofiling
thenewsharesandbenefitfromallrights(dividends,votingrights).

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On25May2008,theHeragroupandthelistedcompaniesIride(ownedbythemunicipalitiesofTurinandGenoa)andEna
(ownedbythemunicipalitiesofPiacenza,Parma,andReggioEmilia)signedaletterofintentforthemergerofthethree
companies.Thismarkedthestartupofthemergerprocess.
Pageupdated10january2014