Mergers and Acquisitions (M&A)

What Is a Business Merger?

A merger is a voluntary combination of at least two companies, resulting either in the absorption of one company by another or the creation of a new entity.

Mergers can be classified as follows:

• Horizontal merger – occurs when companies from the same industry producing similar products merge
• Vertical merger – involves companies operating at different stages of the same production process
• Conglomerate merger – involves companies from entirely different industries

Companies involved in mergers must operate as partnerships or corporations; however, a partnership cannot be the acquiring entity. The resulting company assumes all rights and obligations of the absorbed or merged entities, becoming their legal successor.

Professional M&A Transaction Support from Destrier

The Destrier team is more than a group of experienced professionals — we are your strategic partner in mergers and acquisitions. Our unique offering combines legal precision with a holistic approach, ensuring comprehensive support at every stage of the M&A process.

Comprehensive Advisory at Every Stage

Our experts guide you through the entire M&A process — from initial analysis and due diligence to transaction finalization and post-deal support. With years of experience and deep market insight, we help minimize corporate risks and ensure full legal security.

Expertise in Equity Transactions

Destrier specializes in equity transactions, including mergers, acquisitions, and the sale of shares and stocks. We also advise on corporate restructuring, whether related to succession planning or changes in ownership structure.

Prepared for Every Challenge

We continuously monitor legal developments and adapt our advisory services to current market trends. With an extensive network of contacts both in Poland and abroad, we provide full support for cross-border transactions.

Top-Quality Service and Individual Approach

At Destrier, we prioritize efficiency, transparency, and clear communication. Every client is supported by a team led by a partner or senior lawyer who ensures tailored solutions aligned with your business goals.

Trust the professionals at Destrier and achieve your strategic business objectives with us by your side. Contact us today to receive a personalized M&A strategy.

Mergers vs. Acquisitions – Key Differences

In everyday language, mergers are often confused with acquisitions, but they are not synonymous. In a merger, both companies retain their status and combine to form a new entity. In an acquisition, a larger company absorbs a smaller one, and no new entity is created.

Mergers and acquisitions are collectively referred to as M&A transactions.

Both processes are regulated by the Polish Commercial Companies Code.

According to Article 492 §1 point 1 of the Code:

• A merger may occur through the transfer of all assets of the acquired company to the acquiring company in exchange for shares or stocks granted to the shareholders of the acquired company (merger by acquisition)
• Or through the formation of a new corporation or limited joint-stock partnership, which receives the assets of all merging companies in exchange for shares or stocks in the new entity (merger by formation of a new company)

Types of Acquisition Transactions:

• Share or stock purchase – requires compliance with the Commercial Companies Code and the company’s articles of association
• Asset purchase – typically involves acquiring the entire business and its assets

Corporations may merge with other corporations or partnerships, but a partnership cannot be the acquiring entity or the newly formed company. Partnerships may merge only by forming a corporation.

Civil partnerships cannot participate in mergers due to their lack of legal personality.

Why Companies Merge or Acquire – Key Benefits

M&A transactions are often driven by the desire to increase market share or reduce costs by consolidating functions such as administration or accounting. Lower operating costs enhance competitiveness.

The resulting entity benefits from the combined experience, equipment, and knowledge of both companies. M&A can also facilitate entry into new markets — for example, a foreign company with substantial capital may acquire a well-known local brand, gaining immediate customer recognition.

Financial motivations may include tax advantages, higher debt limits, or the use of surplus capital.

Impact of M&A on Employees

For employees, both mergers and acquisitions mean a change of employer. The new entity assumes all employment contracts and must honor existing terms. In an acquisition, the acquiring company becomes the new employer; in a merger, it is the newly formed company.

The new employer cannot terminate contracts solely due to the merger or acquisition. Employees may choose not to accept the change and have the right to resign within two months of the transition.

Company Merger Process – Key Information

Once the merger method is selected, the companies involved prepare a written merger plan. The required elements of the plan are outlined in Article 499 of the Polish Commercial Companies Code and include:

• The type, name, and registered office of each merging company, the method of merger, and — in the case of forming a new company — the type, name, and registered office of the new entity
• The share or stock exchange ratio between the acquired company and the acquiring company or the newly formed company, including any additional payments
• Rules for allocating shares or stocks in the acquiring or newly formed company
• The date from which the shares or stocks entitle holders to participate in profits
• Rights granted by the acquiring or newly formed company to shareholders and other entitled parties from the acquired company
• Special benefits granted to members of the merging companies’ governing bodies or other participants in the merger, if applicable

The merger plan must be accompanied by:

• Draft resolutions on the merger
• Draft amendments to the articles of association or statute of the acquiring company, or the draft articles/statute of the newly formed company
• Valuation of the assets of the acquired company or merging companies as of a specified date in the month preceding the filing of the merger plan
• A financial statement prepared for the merger date using the same methods and format as the last annual balance sheet

The plan and attachments must be submitted to the registry court competent for the acquiring company or the newly formed company. A request for review by an independent auditor must also be filed — unless all shareholders of the merging companies agree to waive the audit.

Legal Consequences for the Acquired or Merging Companies

The acquired company and any companies merging to form a new entity are dissolved without liquidation. This takes effect on the date of their removal from the register. On the merger date, shareholders of the acquired or merging companies become shareholders of the acquiring or newly formed company.

M&A Transactions – Our Offer

Contrary to popular belief, mergers and acquisitions involve much more than capital consolidation or changes in management. M&A transactions are complex and consist of many interrelated elements, including extensive documentation. A poorly designed M&A strategy can lead to disappointing results.

Transactional advisory in M&A involves market analysis to identify optimal financing sources, potential investors, and the development of a strategic action plan.

Destrier Group provides full legal support throughout M&A transactions. We advise on all aspects of mergers and acquisitions. Our M&A advisory services include:

• Preparing detailed financial and legal insights relevant to the transaction
• Participating in negotiations with potential partners and conducting due diligence
• Defining the goals and strategy of the merger or acquisition
• Drafting all necessary documentation
• Valuing the target company to determine its true worth

What Is the Purpose of Due Diligence in M&A?

Due diligence is an in-depth investigation of the company to be acquired or merged. It involves a thorough review of financial, legal, HR, technical, and strategic matters. Information is gathered through document analysis, registry verification, and interviews with company representatives.

The process is conducted by a team of lawyers and accounting experts. The result is a comprehensive report that provides a clear picture of the target company’s condition. Based on this report, the acquiring party develops a negotiation strategy and — most importantly — decides whether the transaction is beneficial.

Contact us to learn more or schedule a free consultation.