1. Anatomy of a Cross-Border Transaction
Presented by:
Susan Eandi | Partner, Palo Alto
Barbara Klementz | Partner, San Francisco
Darcy Down | Partner, Chicago

2. Presenting Today… Darcy Down Susan F. Eandi Barbara Klementz
Partner, Chicago
Darcy Down
Partner, Palo Alto
Susan F. Eandi
Partner, San Francisco
Barbara Klementz

3. About Baker McKenzie: Our global reach
Baker McKenzie covers the world over. With our expansive global footprint, our clients tell us they rely on our ability to provide a deep level of local expertise while ensuring a global perspective to their business and legal needs.
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In cooperation agreement

4. Cross-Border Transactions
A "cross-border," "multi-jurisdictional" or "international" transaction is any transaction involving two or more countries.
Cross-border transactions are not limited to transactions between parties that are headquartered in different jurisdictions; the category includes any transaction that involves key personnel, assets, markets, contracts and/or relationships in more than one country.
What & Why
Although today's focus is on cross-border deals (i.e., M&A), cross-border transactions also include joint ventures, strategic alliances, business process outsourcing, supplier and other commercial arrangements.
Today, nearly all transactions are cross-border transactions.

5. Cross-Border Deal Focus
High-Growth Markets
Cross-border M&A has been on the rise, with the market expected to further heat up (cross-border transactions account for 21.1% of total announced worldwide M&A deals in Q1 2017).
Companies continue to expand beyond the BRIC countries (Brazil, Russia, India, China) to include other high-growth markets, including the CIVETS countries (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), among others.
Information technology sector is seeing the largest number of cross-border M&A deals at 271 global deals so far this year.
US outbound M&A in the Healthcare/ Life Sciences sector also on the rise with 27 deals valued at over $31 billion so far this year.

6. 10 Elements to Successfully Navigate a Cross-Border Deal
16 April 2018
10 Elements to Successfully Navigate a Cross-Border Deal 1
Kickoff 6
Employee Transfers and Benefits 2
Transaction Structure 7
Negotiating / Drafting 3
Due Diligence 8
Dispute Resolution 4
Anticorruption 9
Deal Execution
Baker & McKenzie have found to be the 10 elements to successfully navigate a cross-border deal. They are listed on this slide and follow the typical progression or life-cycle of a cross-border transaction. I will cover each element in about 5 minutes apiece, (i) starting with the goal of each element, (ii) followed by what we have see as the biggest risks, (iii) then we'll share what we have developed with our global clients as best practices, and (iv) I'll close with a short take-away tip that captures the essence of each element. So, let's get started. 5
Antitrust / Regulatory 10
Integration Planning

7. 1
Kickoff

8. Kickoff Goal Risks Best Practices
16 April 2018
Kickoff
Goal
Run a smooth cross-border deal in spite of international "complications"
Risks
Not bridging different legal systems, accounting standards, management structures
Not coordinating and executing across multiple borders in multiple time zones
Best Practices
Build a deal team with cross-border skills and sensitivities
Identify and address up-front language, cultural, employee and legal differences
Prioritize project management with a focus on key roles and realistic timing
7 – DAS: The first element, as you would expect, is the "Kickoff". Since the goal is a smooth cross-border, deal, we have found that each transaction benefits from a thoughtful set-up and somewhat formal kickoff meeting – ideally, with all key stakeholders. Cross-border transactions by their very nature are fraught with the risks brought on by a multitude of legal systems, accounting standards, and management structures – not to mention the obvious differences in time zones, cultures, and languages.
Our clients have found that it's important to bring together a deal team (both internal and external) with cross-border skills and sensitivities. Certainly, some companies have much deeper experience in multinational transactions, but even those who are relatively new to the arena can tap expertise from individuals in the organization with international backgrounds and experiences. Also, support from external players – legal, accounting, finance, HR – can fill in any gaps.
Another key is project management. A cross-border deal requires an even more organized process with flowcharts, tracking, responsibilities, follow-up, and the like. Shared data sites and extranets have become the norm for staying on top of all aspects of a cross-border transaction. Finally, we have found that appointing a person, often full-time, as the project manager is a driver for smooth and successful deals.
Tip #1: Proactively manage through unique elements of cross-border transactions to minimize deal disruption and maximize deal success

9. 2 Transaction Structure 16 April 2018
9 – DAS: Structuring the Transaction is one of the earliest decisions, even if only a tentative or strawman decision. And, the "Transaction Structure" is paramount to set in motion many of the issues to follow, such as tax, diligence, and regulatory.
Typically, a multinational transaction presents a mixed bag of what one could acquire (or sell). A buyer certainly wants to avoid picking up unwanted assets, liabilities, or employees. And, of course, the risk of the opposite – not getting the ones needed to run the business on Day 1 – can be even more fatal. So, identifying exactly what's being bought and sold (as simple as that sounds) is often not clarified at the outset, which it should be.
As we all know, the deal structure is often driven by tax considerations. The seller usually is looking for capital gains or other advantaged tax treatment. And, the buyer wishes for a step-up in the assets of the business since goodwill is often part of the purchased value. Although usually a tension – what helps the seller often triggers a tax bill for the buyer – there are many strategies that advantage both parties. As such, a discussion between the parties at the outset around the deal structure can highlight immediately can we together save our collective tax burden. Then, it's just a matter of deciding who gets how much of the tax benefit. Such a tax discussion at best is a win-win for the parties and, at worst, simply frames the combined tax cost that the parties can quantify and allocate.
The structure also impacts diligence. A share deal usually triggers fewer third party approvals since the entire corporate entity changes hands. Key contracts need to reviewed very carefully to see if assignment or change of control clauses drive the preferred transaction structure. Also, as Matthew will discuss later, employee transfers can be different in many jurisdictions if a workforce is to be transferred in a share or an asset deal.
Similarly, valuable governmental licenses and permits can drive a deal from an asset to a share transaction. If it takes 12 months for a company to be qualified as a government contractor – or even to obtain a water discharge permit – an asset deal which can require the buyer to be newly licensed can trump tax and all other considerations.
I usually think about 5 buckets of what is transferred in a deal, namely: assets, liabilities, employees, contracts, and licenses/permits. If you get the transfer of those 5 items right, you probably have the deal structured correctly.
Transaction Structure

10. Transaction Structure
16 April 2018
Transaction Structure
Goal
Agree on an international transaction structure that maximizes overall value
Risks
Acquiring unwanted assets or personnel or assuming unwanted liabilities
Not acquiring the assets and personnel needed for Day 1 readiness
Missing tax savings opportunities or causing increased tax costs
Triggering avoidable regulatory or third-party approvals that could affect closing or timing
Best Practices
Identify early the potential structures (e.g., asset v. share v. mixed transactions)
Understand the effect of the structures on the commercial, tax, legal, personnel and IT aspects of the transaction across key jurisdictions
Allocate … very carefully … all tax burdens between the parties
Leave room in any preliminary agreement (e.g., letter of intent) for additional negotiation of the structure following key due diligence
Structure local asset transfers in a manner that minimizes the transfer tax burden
9 – DAS: Structuring the Transaction is one of the earliest decisions, even if only a tentative or strawman decision. And, the "Transaction Structure" is paramount to set in motion many of the issues to follow, such as tax, diligence, and regulatory.
Typically, a multinational transaction presents a mixed bag of what one could acquire (or sell). A buyer certainly wants to avoid picking up unwanted assets, liabilities, or employees. And, of course, the risk of the opposite – not getting the ones needed to run the business on Day 1 – can be even more fatal. So, identifying exactly what's being bought and sold (as simple as that sounds) is often not clarified at the outset, which it should be.
As we all know, the deal structure is often driven by tax considerations. The seller usually is looking for capital gains or other advantaged tax treatment. And, the buyer wishes for a step-up in the assets of the business since goodwill is often part of the purchased value. Although usually a tension – what helps the seller often triggers a tax bill for the buyer – there are many strategies that advantage both parties. As such, a discussion between the parties at the outset around the deal structure can highlight immediately can we together save our collective tax burden. Then, it's just a matter of deciding who gets how much of the tax benefit. Such a tax discussion at best is a win-win for the parties and, at worst, simply frames the combined tax cost that the parties can quantify and allocate.
The structure also impacts diligence. A share deal usually triggers fewer third party approvals since the entire corporate entity changes hands. Key contracts need to reviewed very carefully to see if assignment or change of control clauses drive the preferred transaction structure. Also, as Matthew will discuss later, employee transfers can be different in many jurisdictions if a workforce is to be transferred in a share or an asset deal.
Similarly, valuable governmental licenses and permits can drive a deal from an asset to a share transaction. If it takes 12 months for a company to be qualified as a government contractor – or even to obtain a water discharge permit – an asset deal which can require the buyer to be newly licensed can trump tax and all other considerations.
I usually think about 5 buckets of what is transferred in a deal, namely: assets, liabilities, employees, contracts, and licenses/permits. If you get the transfer of those 5 items right, you probably have the deal structured correctly.
Tip #2: Analyze all potential deal structures, jointly select best overall approach

11. Why Structure Matters … from an Employment lawyer's perspective
Employee Transfers
Stock deal
Asset deal US
No change to employer
Termination and hire
Americas
Generally termination and hire, but country- specific peculiarities
APAC
Generally termination / resignation and hire
EU/EEA
Generally automatic transfer
Rest of Europe

12. Why Structure Matters….for Equity Awards
Stock Deals
Change of Control event – 4 possibilities (at least!)
Acceleration of Vesting/Lifting of Restrictions
Cash Out
Assumption / Conversion (a.k.a. “rollover”)
Substitution
Combination of Above
Asset Deals
Employees treated as terminated because no longer part of control group
Cancel unvested awards
Allow outstanding vested options to be exercised within prescribed post-termination exercise period
Continue vesting and exercisability of awards

13. 3
Due Diligence

14. Due Diligence Goal Risks Best Practices
16 April 2018
Due Diligence
Goal
Conduct risk-based diligence cost effectively across multiple jurisdictions
Risks
Overlooking risks that are significant negative value drivers
Duplicating efforts with cost overruns among diligence team members
Best Practices
Identify main jurisdictions, assets, personnel and relationships
Prioritize key areas of concern
Scope diligence with specific budgets for topics and jurisdictions
Assign responsibilities among business, financial and legal team
Define form and regularity of diligence reports
Quantify diligence results and feed into deal team
11 – DAS: "Diligence" is the 3rd element for a successful cross-border deal – and often one of the most expensive. That's why it's essential to have a plan on how to conduct risk-based diligence cost effectively across many jurisdictions.
Gone are the days when outside counsel is told "conduct diligence and send me a 300-page report summarizing every document in the data room. Oh, and I don't care how much it costs, just get it done."
Now, the best practice, which Baker has, I think, refined quite well, is to map out the exact scope of diligence. I like to use an x and y axis with x being the jurisdictions and y being the subject areas. We sort the jurisdictions by "primary" (usually those with a manufacturing facility), "secondary" (those with a meaningful operational hub), and "tertiary" (those with a small sales or support office). Then, we list the 10 or so subject areas – corporate, commercial, HR, real estate, environmental, litigation, IP, tax, – and decide on materiality thresholds, level of review, scope of analysis, and form of report. Finally, we put a budget in each of those boxes and come up with a total.
I recently had a client working on a significant cross-border deal, but in an auction setting. So, the client had some reservation on how much to spend for the diligence on a deal that it might not win. After the x/y scoping and budgeting exercise, we landed on $500,000 for the 20 –country diligence. The client paused and said, "How much will $300,000 get me?" Great question. We then re-scoped, skipping some tertiary jurisdictions, scaled back on some real estate and environmental review and landed on the client's budget. With this up-front discussion, diligence was scoped and priced without any surprises. That's today's best practice.
A final diligence tip is the format for reporting the results of the investigation. Gone are the bible-sized diligence reports. Often the company needs but one slide for the board. What are the potential show- stoppers? Or, negative value drivers above a materiality threshold, which often can be in the millions of dollars? Certainly, some back-up report for this one slide is necessary, for which we use red light, yellow light, and green light for flagging issues. We use blue lights for "additional information" is required to complete the assessment. This simple reporting is, we have found, most helpful for today's stretched and busy in-house deal teams who want to stay out of the weeds and just need the needle-moving issues.
With this approach, diligence results can be fed in real-time into the deal team.
Tip #3: Identify key risk areas and scope diligence by subject and jurisdiction

15. "Big Ticket" Employment Diligence IssuesUS
Wage and hour compliance / misclassification
Consultant misclassification
Benefits liabilities (underfunded pensions)
Employee IP
Employee entitlements (e.g., retention, severance, change in control)
Non-competes
Unions
Litigation
Additional items OUS
Works' councils or other employee representative groups
CBAs & social plans
Benefits
Payroll (non)compliance
Expats
Contractual entitlements

16. "Big Ticket" Equity Award Diligence Issues
16 April 2018
"Big Ticket" Equity Award Diligence Issues
Section 409A (e.g., options not granted at FMV)
Failure to properly withhold/report taxes and/or pay employer social taxes due on equity awards
Taxation of mobile employees
Incorrect application of tax-qualified treatment
Promise of equity awards in employment / offer letters
Failure to complete regulatory filings for equity awards
Change of Control agreements (watch for double triggers where CoC tied to employer, not issuer)

17. 4
Anticorruption

18. Anticorruption Goal Risks Best Practices
16 April 2018
Anticorruption
Goal
Identify corruption-related aspects of business during diligence and develop early in transaction process remedial steps to reduce post-closing risk
Risks
Being subjected to civil fines and penalties and/or criminal prosecution
Losing key contract relationships and value of business
Generating negative impact on either party's and business's reputation
Best Practices
Focus diligence investigation on relevant jurisdictions, customers, key relationships
Understand market and best practices in business's industries
Consider business's compliance history as well as its policies and procedures
Partner with forensic accounting team to "follow the money"
Understand how business actually conducts activities in "tough" jurisdictions
13 – DAS: And, the last slides before I turn the mic over to Matthew touches on one of today's hottest topics, "Anticorruption".
As you may know, Baker just completed along with the Business Intelligence Unit of the Economist a broad survey of senior executives about cross-border M&A transactions. We learned – or better said, we confirmed – that the top issue on their minds today when doing cross-border deals (after, of course, is it the right target at the right price) is compliance risk. Boards today are asking, "Have we carefully and thoroughly diligence the corruption and compliance risks of the target business, the JV partner, etc.? Our brand and bottom line are way more important than any single transaction." So, the pressure is on the diligence team to identify the corruption risks in the business and develop a remedial plan to reduce post- closing risk.
The risks are obvious from civil to criminal liability. Also, key contractual relationships can be lost when the "clean" multi-national comes in and stops the illegal activity. Moreover, the distraction to management can be enormous with investigations, employee separations, whistleblowing, government self-reporting, and the list goes on.
The problem, of course, is how to diligence corruption. I've been in lots of data rooms and I have yet to see a tab labeled, "Bribes." So, how does a diligence team uncover and assess corruption problems? There is no silver bullet, but we have with Paul McNulty and his compliance team here at Baker, developed what we think are some best practices:
We focus on the red flags. What jurisdictions are involved (Sweden v. Nigeria)? What types of customers are served (government v. monasteries)? What types of relationship are used (off-shore agents v. well- trained employees)? What industries come into play (energy v. clothing)?
We look at the business's compliance history, policies, procedures, culture, reputation.
Once we've assessed the overall risk profile, we develop a customized plan for diving into any areas of concern. And, two of the best ways to do that are to (i) talk to the relevant players and (ii) follow the money. Interviewing the key individuals, who often are quite willing to "come clean" in the eyes of their new boss, can provide incredibly candid reports. And, teaming with forensic accountants to trace funds can usually provide details not reflected on financial statements.
It's incumbent upon any deal team today to put anticorruption at or very near the top of any diligence exercise – with a very detailed and pragmatic approach.
Tip #4: Make anticorruption diligence a fundamental component of diligence investigation and take an active, pragmatic and multi-faceted approach

19. 5
Antitrust / Regulatory

20. Antitrust / Regulatory
16 April 2018
Antitrust / Regulatory
Goal
Cover all foreign regulatory requirements
Risks
Failing to address antitrust/regulatory approval issues across key jurisdictions, resulting in delays or restructured (or even failed) transactions
Best Practices
Conduct preliminary antitrust/regulatory analysis very early in transaction process
Ensure broad definition of foreign investment laws (exchange controls, defense, sensitive lands, culture, etc.)
Assess applicability of "Gun Jumping" rules in light of planned activities
Identify industry or other regulatory concerns (e.g., CFIUS)
Identify both procedural and substantive requirements and impact on deal timing
Be open to exploring deferred or "hold separate" closing options
Best Practices
Conduct preliminary antitrust analysis early in the process (substantive v. procedural issues)
Identify industry or other regulatory concerns (e.g., foreign investment, exchange control, defense, customs, licenses, permits, and other approvals)
Identify effect on transaction timing
Assess applicability of "Gun Jumping" rules
Assess applicability and impact of privacy and data protection laws
Tip #5: Identify and develop early plan for clearing antitrust/regulatory concerns to prevent surprises and facilitate smooth closing and integration

21. 6
Employee Transfers and Benefits

22. Employee Transfers and Benefits
16 April 2018
Employee Transfers and Benefits
Goal
Facilitate an orderly and smooth employee transition
Risks
Inadvertently triggering severance or other HR-related termination liabilities
Failing to comply with required approvals, consultations and/or notices for employee representative groups (e.g., unions, works councils)
Disrupting workforce/benefit plans with attendant damage to business
Best Practices
Include HR and L&E counsel as early as possible
Understand and account for the method of transfer and implications under local law
Identify early in the process approval or consultation requirements
Drill down on all employee benefits and employee expectations
Assess applicability and impact of privacy and data protection laws
Timely establish local subsidiaries where new employer entities are required
Will impact transaction structuring/planning:
Employees/workforce – migration to "our benefits" (when?)
Best Practices
Understand and account for the method of transfer and implications under local law – termination/hire, resignation/hire, automatic transfer or employer substitution)
Identify early in the process approval or consultation requirements (pre-signing; pre-closing) and consequences for deal structure and timing consideration for transaction
Establish local subsidiaries where new employer entities are required
Identify and address employee transfer and benefit issues across jurisdictions
Tip #6: Get all of the people-stuff right … gather, plan and execute

23. Top 10 Employment Pitfalls and How to Avoid Them
"Hidden" HR liabilities in unenforceable or expensive change in control agreements; heavy severance obligations; pensions liabilities & costly benefits; ineffective IP assignment; poor relationships with works council/union
Thoughtful diligence of material, practical issues unique to each country at the outset 2
Increase in costs and timelines for employee transfers due to decisions made at LOI / MOU stage of transaction
Get all stakeholders in the deal room; don't assume that these areas will simply "fall into place" 3
Creation of corporate tax liability and violation of local consultation obligations due to "early" integration (change of reporting structure, benefits, addresses, etc.) pre-close
Consider "deemed integration" issues at the outset 4
Deal delay / injunctions due to failure to comply with local consultation obligations
Plan for and address EWC, works' council, employee rep and union requirements early 5
Deal delay due to failure to plan for each country transfer method and requirements
Analyze & prepare for how employees will transfer (i.e., automatic transfer vs. "termination" / hire jurisdictions)

24. Top 10 Employment Pitfalls and How to Avoid Them6
Inability to realize anticipated savings through lay-offs
Understand limitations on redundancies due to lack of "at-will" employment and specific protections in relation to a business transfer 7
Inability to realize anticipated savings through benefits harmonization
Address changes to terms and conditions & plan in time for benefit transfers 8
Immigration liability for company and employees without authorization to work
Determine if any immigration issues; visa / work permit authorization & sponsorship may need to be transferred or re-applied 9
Unenforceable or expensive noncompetes
Understand limitations of non-compete agreements; usually for "Key Employees", but limit on legality even with compensation sometimes 10
Lack of realization of value of deal (acquisitions) due to cultural mismatch
Plan for and address local country and company cultural issues at the outset

25. Considerations for Equity Awards
Stock Deals (awards are rolled over, cashed out and/or accelerated)
Tax considerations
Taxation at time of closing
Loss of favorable tax treatment (for employees and/or employer)
Legal considerations
Assumption/substitution viewed as new grant triggering filing requirements
Asset Deals (employees holding awards treated as terminated)
TUPE considerations (for buyer and seller)

26. 7
Negotiating / Drafting

27. Negotiating / Drafting
16 April 2018
Negotiating / Drafting
Goal
Use the negotiating/drafting process to bring the parties together and eliminate potential deal disruptions from differing transaction perspectives
Risks
Failing to appreciate (and bridge) other parties' cultural and legal social norms, leading to frustration or even failure in deal process
Not resolving differing perspectives on "transaction style"
Best Practices
Understand and account for culture and perspective in negotiation
Negotiate governing law (and "transaction style") very early in process
Failure to understand seller's culture could lead to buyer frustration in negotiation - relationship development is important in some jurisdictions (e.g., Asia and Latin America) and for some sellers (e.g., founder- or family-owned target)
Agreeing to style and governing law of the transaction agreement without due consideration (e.g., in letter of intent) could negatively impact buyer protections (e.g., UK-style agreements and UK law and market are significantly more pro-seller than in the U.S.)
Best Practices
Understand and account for seller's culture and perspective in negotiation (e.g., more time may be spent on relationship building or seller premium on post-closing treatment of target employees)
Understand implications of and negotiate style and governing law of the transaction agreement as an item of real value
Identify effect that Local law may have on transaction, even when the agreements are governed by foreign law – e.g., voting, share issuance, liquidation procedures, minority protections
Negotiate form documents for Local business transfer / asset transfer documents or share transfer documentation required to effect transaction and revise only to extent required by Local law (i.e., do not permit substantive negotiation of main deal terms at local level)
Don't forget: Agreement may need to be filed publicly (US or locally)
Tip #7: Take the time to understand/appreciate differing perspectives and leverage for your benefit in negotiation

28. 8
16 April 2018
Dispute Resolution

29. Dispute Resolution Goal Risks Best Practices
16 April 2018
Dispute Resolution
Goal
Implement an efficient and reliable process to resolve post-closing disputes
Risks
Falling into potential bias and other "home court" traps
Not factoring increased time and costs of foreign process and venue
Assuming judgments are easy to enforce internationally
Best Practices
Provide detailed roadmap for anticipated - and inevitable - post-closing disputes
Do not simply delegate the financial adjustments to the accounting team
Consider most likely disputes (and party initiating claims) and choose appropriate forum
Build in security and other self-help tools
Consider international arbitration for bespoke issues and confidentiality
Understand the best way to resolve disputes is to avoid them
Best Practices
Consider most likely dispute & choose appropriate forum
Consider arbitration under an internationally recognized regime - typically preferable (especially for closing balance sheet and indemnification disputes); provisions to be agreed upon include:
Arbitration rules
Language of arbitration
Discovery or not
Costs borne by prevailing party
Forum and governing law
Tip #8: Identify and address (prior to closing) most likely post-closing disputes

30. 9
Deal Execution

31. Deal Execution Goal Risks Best Practices
16 April 2018
Deal Execution
Goal
Plan for and achieve a smooth transaction execution and closing
Risks
Failing to timely close
Allowing less-material aspects of deal to delay closing of entire transaction
Not identifying interrelationship of formalities (e.g., gating items)
Failing to identify and address local requirements
Best Practices
Carefully plan through document execution and closing requirements
Draft very detailed step plan for closing with timelines and responsibilities
Consider any funding-related issues to pre-position and/or deliver deal consideration
Develop protocol to delay local closings or other isolated aspects of larger transaction
Plan for any required notifications/deliveries immediately following closing
Assume every aspect will be more complicated than a wholly-domestic transaction
24 – DAS: The penultimate element to successful cross-border deals – "Deal Execution" - follows on some of our opening topics about careful planning and organization. This topic relates to the goal of a smooth execution and closing. The risks to poor deal execution is failing to close on time, or not at all.
We all have heard stories of troubled closings when a somewhat immaterial aspect delays the overall closing. The seller forgot to start the governmental review clock in a far-off jurisdiction or overlooked the works council consultation. Or, the buyer failed to form an acquisition vehicle or obtain the permits to flip the switch on the day after the closing. There is hardly a worse feeling when all eyes turn to the lawyers for not being ready to close when all other players have done their jobs.
To avoid such career limiting (or ending) situations, our best practice is to meticulously map out every single step in the pre-closing and closing mechanics. The inter-dependencies and timing for each step and sub-step needs to be analyzed and baked into the timeline. The flow of funds must be coordinated with Treasury. Entities need to be formed (or readied) in every jurisdiction where asset deals are to take place. Antitrust and other clearances must fall into place.
And, smart cross-border lawyers have drafted into the deal documents a protocol for delayed closings. What are they, you ask? Well, "delayed closings" are closings typically in the non-material jurisdictions that can wait until later, allowing for the main portion of the transaction to close. They are, of course, a myriad of issues around the concept of delayed closings, but a plan to have the seller keep the Ukrainian business until the Ukrainian merger control authorities have cleared the deal can often put smiles back on the C- suite faces. This is just one example of how to deal with the closing challenges.
But, the overall takeaway is to not be surprised by surprises and be overly careful in planning each aspect of the closing.
Tip #9: Meticulously identify and plan closing logistics

32. 10
Integration Planning

33. Integration Planning Goal Risks Best Practices
16 April 2018
Integration Planning
Goal
Maximize deal value through an efficient post-closing integration
Risks
Losing value in business
Not realizing the modeled synergies
Incurring significant diversion of management attention
Best Practices
Begin preliminary integration planning at the very outset of transaction
Involve all key functional areas (e.g., corporate, tax, employment/HR, benefits, real estate, IT, trade compliance)
Prioritize IT integration
Leverage results from diligence as integration playbook
Require business to rectify any noncompliance matters prior to closing
26 – DAS: The final element of a successful deal is "Integration Planning." As we all have learned, no deal is successful if the integration is unsuccessful.
The value of the business is eroded. Synergies are not realized. Management is distracted. So much goes awry if the newly acquired business is not properly integrated.
The best practice, of course, is to start integration planning at the very outset of the transaction. It's crucial to engage all subject areas – corporate, legal, tax, HR, EH&S, sales, trade compliance – and have individuals serve as stakeholders. For many years, we'd see functional folks come in to the deal (often in the diligence process), make it clear that they have a day job, and expect Corp Dev to handle the integration.
Now, companies are far more sophisticated and have approaches to integration with separate integration teams or carve time from the functional folks to take on integration. A great practice is to use the diligence exercise as a playbook for integration. That's why some of the detailed work in the diligence phase still needs to be done. In fact, the electronic data rooms are typically transferred to the buyer as part of the closing so that the buyer has a rather complete set of files to assist with integration and Day 1 readiness.
One area to add a footnote is IT. We are seeing more and more deals getting hung up on the nitty-gritty of IT hand-over. We'd strongly recommend that IT get an early seat at the deal table. There are many issues from third party licenses (e.g., from SAP) to cloud storage to separate servers to antitrust and security implications. And, they all take time and money to solve.
So, the final tip – and perhaps, one of the most valuable today – is to start integration planning at the very beginning of every deal.
Tip #10: Don't wait until closing to start integration planning

34. Top 10 Tips for Successful Cross-Border Transactions
16 April 2018
Top 10 Tips for Successful Cross-Border Transactions 1
Proactively manage through unique elements of cross-border transactions to minimize deal disruption and maximize deal success 6
Get all of the people-stuff right … gather, plan and execute 2
Analyze all potential deal structures, jointly select best overall approach 7
Take the time to understand / appreciate differing perspectives and leverage for your benefit in negotiation 3
Identify key risk areas and scope diligence by subject and jurisdiction 8
Identify and address (prior to closing) most likely post-closing disputes 4
Make anticorruption diligence a fundamental component of diligence investigation and take an active, pragmatic and multi-faceted approach 9
Meticulously identify and plan closing logistics
#28 – DAS: I hope you found these Top 10 Tips for Successful Cross-Border Deals to be helpful.  5
Identify and develop early plan for clearing antitrust/regulatory concerns to prevent surprises and facilitate smooth closing and integration 10
Don't wait until closing to start integration planning

35. Suite of Baker McKenzie Resources
Global Transactions Forecast – with Oxford Economics
Global Private M&A Handbook
International Joint Ventures Handbook
Global Public M&A Handbook
Post-Acquisitions Integration Handbook
M&A By Design: Timing and Complexity of Cross-Border Acquisitions

36. Cross-Border M&A Resources

37. Partner, Chicago
Darcy Down
Partner, Palo Alto
Susan F. Eandi
Partner, San Francisco
Barbara Klementz