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Parts of merger and acquisition contracts ?Parties and recitals. ?Price, currencies, and structure. ?Representations and warranties. ?Covenants. ?Conditions. ?Termination provisions. ?Indemnification. ?Tax.
There are two basic merger structures: direct and indirect. In a direct merger, the target company and the buying company directly merge with each other. In an indirect merger, the target company will merge with a subsidiary company of the buyer.
In a merger, two separate legal entities come together to form a new joint legal entity. In an acquisition, one company (the acquirer) buys another company (the target) and takes control of its assets and operations.
Every M&A transaction involves at least one purchaser, or buyer, the party that will be making the acquisition. This is the person (i.e., individual or company) that signs the purchase agreement, pays the purchase price and which, after closing, directly or indirectly, owns or controls the target company or its assets.
?parties? means Parent, Merger Sub and the Company.