How can you structure a partnership agreement to mitigate risks in mergers and acquisitions?

1 Define the objectives and scope of the partnership

The first step in structuring a partnership agreement is to clearly define the objectives and scope of the partnership. What are the strategic goals and benefits of the M&A deal? What are the roles and responsibilities of each partner? What are the expected outcomes and performance indicators? How will the partnership be governed and managed? These questions will help you align the expectations and interests of the partners, and avoid potential conflicts and misunderstandings.

2 Assess the risks and opportunities of the partnership

The second step in structuring a partnership agreement is to assess the risks and opportunities of the partnership. What are the strengths and weaknesses of each partner? What are the threats and opportunities in the market and the industry? How will the partnership affect the competitive position and value proposition of each partner? How will the partnership deal with regulatory, compliance, and ethical issues? These questions will help you identify and prioritize the risks and opportunities of the partnership, and develop strategies and plans to address them.

3 Negotiate the terms and conditions of the partnership

The third step in structuring a partnership agreement is to negotiate the terms and conditions of the partnership. What are the financial and non-financial contributions and benefits of each partner? How will the ownership and control of the partnership be distributed? How will the profits and losses be shared? How will the assets and liabilities be allocated? How will the intellectual property and confidential information be protected? These questions will help you determine the fair and equitable terms and conditions of the partnership, and avoid potential disputes and litigation.

4 Establish the governance and management structure of the partnership

The fourth step in structuring a partnership agreement is to establish the governance and management structure of the partnership. Who will make the strategic and operational decisions for the partnership? How will the communication and coordination among the partners be facilitated? How will the performance and progress of the partnership be monitored and evaluated? How will the feedback and input of the stakeholders be solicited and incorporated? These questions will help you create a clear and effective governance and management structure for the partnership, and ensure accountability and transparency.

5 Define the exit and termination clauses of the partnership

The fifth step in structuring a partnership agreement is to define the exit and termination clauses of the partnership. What are the circumstances and conditions that would trigger the exit or termination of the partnership? How will the exit or termination process be executed? How will the assets and liabilities be divided? How will the intellectual property and confidential information be handled? How will the disputes and claims be resolved? These questions will help you prepare for the possible scenarios and outcomes of the exit or termination of the partnership, and minimize the costs and damages.

6 Review and revise the partnership agreement

The sixth and final step in structuring a partnership agreement is to review and revise the partnership agreement. How will the partnership agreement be reviewed and revised? How often and by whom? What are the criteria and procedures for making changes and amendments? How will the changes and amendments be communicated and implemented? These questions will help you ensure that the partnership agreement is updated and adapted to the changing needs and circumstances of the partnership, and remains relevant and effective.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?