Mergers and Acquisitions vocabulary in legal English
Antitrust is the way that the government promotes markets when there are market failures. It has nothing to do with the idea of free information.
— Bill Gates
— HBR
The series is designed to bring today’s managers and professionals the fundamental information they need to stay competitive in a fast-moving world.
Shop on Amazon with Us
This casebook, designed for a readership of graduate students, policy makers, and practitioners in competition law, aims to provide a comprehensive reference on EU and UK competition law. While the majority of the text comprises analysis supplemented with detailed commentary and analysis of judgments, NCA and Commission decisions, and legislation, the casebook also gives a high-level introduction to the design and history of EU and UK competition law
Start here with …
M & A in English
Listening Activity
Comprehension Questions
Writing Activity
Additional Links & Resources
Vocabulary
Area of law: Commercial Law
Section 17 – M & A Class discussion.
Listening task: Take notes.
Timing: This listening is 6 minutes and 46 seconds long.
Lawyer: Good afternoon. Today’s seminar is, as you know, on the topic of advising corporate clients. And I believe I asked you to prepare for today’s session by doing some investigation on one of the corporate giants in this country, British Airways. I hope you’ve had the chance, despite the fact that your end of year exams are looming to do some reading on the subject of BA and have thought about some of the legal issues the company is dealing with at the moment.
Law Student 1: Good afternoon, Professor Thompson. I’ve managed to have a look online and there’s quite a lot of legal activity happening with BA at the moment.
Lawyer: Good. Give me an example please.
Law Student 1: Well as I said, there’s quite a lot. The biggest news is probably the merger with the Spanish airline, Iberia. That has a lot of legal implications.
Lawyer: It does indeed. What can either of you tell me about the merger?
Law Student 2: I read that it’s expected to be completed by the end of this year and that it’s been approved by the European Commission.
Lawyer: In other words, the merger of the 2 airlines doesn’t breach European competition law. The European Commission therefore feels that the new company formed by the merger will still face competition from other airlines and passengers will continue to have a good choice of airline companies to choose from. What else can you tell me?
Law Student 2: That the deal is still waiting for shareholder approval.
Lawyer: Yes. No vote has been taken as yet but the shareholders are expected to approve the deal. Now why is that? Does anyone have any of the facts and figures behind the merger?
Law Student 1: Yes. Both BA and Iberia have been reporting heavy financial losses in their financial statements for the past few quarters, and the merger’s expected to put them back into profit. Apparently it’s going to save €400 million, which translates into roughly £350 million. There’s every reason for the shareholders to support the deal.
Lawyer: Good. Now, apart from the merger, what more did you manage to find on the topic of BA?
Law Student 2: That they’re having problems with the trade union that most of their employees belong to. It’s called BASSA, and the union’s been in dispute with the BA Chief Executive, Willie Walsh, for a long time now. It’s cost £150 million so far with no end in sight.
Lawyer: Excellent. This is exactly what a huge corporation has to deal with. On the one hand it’s taking part in a multi-million pound merger, and at the same time it’s struggling with the trade union. I hope you see why a good corporate lawyer needs to know more than just the basics of corporate law. What do you know about this employment dispute?
Law Student 2: That the company decided to change the working terms and conditions of a lot of its staff, which has led Mr Walsh into a 20-month dispute with the airline’s cabin crew. And apparently it’s far from over. There were strikes earlier in the year but the newspapers say the staff are considering another walkout over Christmas. BA is trying to save £160 million over 10 years by changing working conditions, but the staff are having none of it.
Law Student 1: That could hit them hard. They’ve already lost a fortune from the strikes earlier this year; then of course there were all of the losses associated with the volcanic ash cloud. It’d be amazing if they made a profit in this financial year.
Lawyer: It would indeed. Especially as they’ve just been dealt another harsh financial blow. Who can tell me about that?
Law Student 1: Is this about the fine they’ve just had from the European Commission? They’ve been ordered just this week to pay a fine of €104 million. But they’re not the only airline to be fined. The BBC website said that 11 airlines have been fined a total of €800 million for breach of EU regulations.
Lawyer: That’s right. So we’ve looked at mergers, employment law and now what area of law are we in?
Law Student 2: Is it competition law? I know that BA is one of several airlines that have breached EU competition law but I don’t entirely understand what they’ve done wrong.
Law Student 1: Me neither. I know BA was found to be a member of a cartel, but I’m not sure what that means.
Lawyer: Action against cartels is a specific type of antitrust enforcement. A cartel is a group of similar, independent companies, which join together to fix prices, to limit production or to share markets or customers between them. Instead of competing with each other, cartel members rely on each other’s agreed course of action, which reduces their incentives to provide new or better products and services at competitive prices. As a consequence, their clients, who are consumers or other businesses, end up paying more for less quality. This is why cartels are illegal under EU competition law and why the European Commission imposes heavy fines on companies involved in a cartel.
Law Student 1: I see. But why weren’t the German airline Lufthansa fined as well? I’m sure they were part of the cartel but weren’t punished.
Lawyer: Because they were what we call the “whistleblowers’. They escaped any penalty because they were the first airline who were part of the cartel to alert the EU to its existence.
Law Student 2: Well that doesn’t seem fair. Who got the biggest fine?
Law Student 1: It was Air France-KLM. They were fined €340 million.
Lawyer: And the problem is, this decision to fine the airlines for this blatant breach of the law opens the way for private claimants to take legal actions as well. Any business that’s used the cargo services, the price fixing applied to the price of moving cargo, not passengers, will now consider trying to get compensation.
Law Student 1: I see. So the company’s dealing with a merger, an on-going employment dispute and possibly thousands of court claimants bringing cases on the grounds that they’ve breached competition law.
Lawyer: That’s it in a nutshell. This is why I always tell you, read widely and keep up-to-date. If you want work as a corporate lawyer you have to be aware of all of the issues a company faces and not limit yourself to a knowledge of corporate law.
Antitrust is the way that the government promotes markets when there are market failures. It has nothing to do with the idea of free information.
— Bill Gates
Comprehension Questions
If the following statement is false, correct it and make it true.
1
These law students have just finished their end-of-the-year exams.
2
The European Commission feels that the BA/Iberia merger does not breach European competition law.
3
BA’s accounts have not shown profit in the months leading up to the merger in question.
4
The dispute with a trade union BASSA is expected to cost a total of £150 million beginning to end.
5
BA a staff decided to strike because of changes in their employment contracts.
6
BA is trying to save £160 million pounds a year for the next 10 years.
7
BA and 10 other airlines have recently been fined by the European commission.
8
The professor says that the cartel results in better service for consumers and businesses.
9
The German Airline Lufthansa informed the EU that a cartel of airlines existed.
10
Both BA passengers and customers using its cargo services may be able to sue for compensation.
General Vocabulary
to loom
a legal issue
a merger
indeed
in other words
a figure
a trade union
in dispute
to struggle
staff
with no end in sight
roughly
to rely on
a strike
profit
loss / losses
a fine
to be fined
a cartel
to impose
a whistleblower
a nutshell
a walk out
to have none of it
far from over
Writing Activity
Area of Law: M & A
Writing Task: Develop an M&A due diligence checklist. Set out a letter to a senior partner or colleague offering your perspective.
Use an introduction in paragraph form, then use bullet points for the body, and then conclude in paragraph form with a call to action.
This book will change how you write.
Wydick’s little book has been a favorite of law students, legal writing teachers, lawyers, and judges for over 25 years. Last January, the Legal Writing Institute gave Wydick its Golden Pen Award for having written Plain English for Lawyers.
Words to live by.
In his book, Plain English for Lawyers, Richard C. Wydick recommends the following tips:
Omit surplus words
Use base verbs, not nominalizations
Prefer the active voice
Use short sentences
Arrange your words with care
Use familiar concrete words
Avoid language quirks
Punctuate carefully
See your level in just 5 minutes.
We can teach you legal English.
Additional Resources
A. Basic Corporate Documents and Documents for Any Subsidiary:
-
- Articles of Incorporation and By-laws …
- Minutes of all meetings …
- List of all states and/or countries …
- Copies of:
- Any voting trust …
- All agreements …
- All agreements …
- Stock books …
- All quarterly and annual reports …
- All press releases issued …
- List of all …
B. Securities Issuances:
-
- Equity Financings …
- Debt Financings …
- Stock option …
- Any other agreements …
- Forms D or any other forms …
C. Shareholder Information:
-
- Records …
- Lists of all current shareholders
- Numerical listing of stock certificates …
- Lists of all options …
D. Material Contracts:
-
- Bankline of credit agreements
- Other agreements …
- All outstanding leases …
- Material contracts …
- Model sales or manufacturing contracts …
- Agreements for loans …
- Schedule of all insurance policies …
- Partnership or joint venture agreements
- Bonus plans, retirement plans, pension plans …
- Form of employee …
- Any other material contracts outstanding …
E. Patent and Trademark Matters:
-
- List of:
- All foreign and domestic patents …
- Any trademarks, trade names …
- Any copyrights …
- Copies of all material agreements …
- Describe importance of existing patents …
- Any correspondence from third parties …
- List of proprietary processes controlled by the company …
- The contact and the name of the law firm …
- List of:
F. Manufacturing:
-
- A breakdown by …
- List of major suppliers …
- Material or outside …
- Description of all toxic …
- Description of any EPA …
G. Operations:
-
- List of third-party developers…
- Form of agreements …
- List of top 20 accounts …
H. Sales and Marketing:
-
- Copies of all market research …
- List of the company’s …
- List of the company’s 20 largest …
- All material licensing agreements …
I. Tangible Property:
-
- List of real and material personal property …
- All outstanding leases …
- List of any security interests …
- Documentation …
J. Litigation and Audits:
-
- All letters which …
- Copies of any auditor letters …
- Active litigation files …
- Any litigation settlement documents …
K. Environmental:
-
- Schedule of hazardous materials stored …
- Schedule of:
- Chemicals, toxic substances …
- Any incidents involving …
- All instances in the past …
- All the facilities …
- All permits …
- Any notices …
L. Employees:
-
- Description of any significant …
- Number of employees …
M. Management:
-
- Completed copies of Directors’ and Officers’ Questionnaires
- Detailed resume of directors … agreements, indemnification agreements, and ”golden parachute” agreements …
- Schedule of all compensation …
- Bonus plans, retirement plans, pension plans …
General Vocabulary Review
to boil down to
to have a bearing on
high-profile
to hand down
a party
a relationship of employment
staff
a corporate advisory company
a claimant
to take place
evidence in court
to trigger off
relevant statute
further declarations
to get things in writing
to hang on
to apply law
infringement
a dispute
a straightforward case
an assignment
to draw up
jurisdiction
on the grounds of
to have copyright in
to issue a claim
to rip off
blatantly
to have a word with someone
a sole trader
personal assets
to hear
the cost
the retail price
just around the corner
in terms of
to drop dramatically
a stall
a logo
not a trace
to set up
a limited company
to bump into
in conjuction with
to spot
a sternly-worded letter
to sky dive
a partner
a written agreement
governing law
engaged in
a number of
a sum
to dismiss
trademark
full and final
to win a case
a small fortune
business premises
a bit shabby
new competition
to waive
to put a charge
to lead to
to show up
maternity leave
to deal with
the case
to harm
to add fuel to the fire
a fee
reasonable legal fees
to add insult to injury
a signature
to bear in mind
complied with
amid a storm
Indeed
just bear with me
royalty
scrutiny
to settle
to sue
to invoice / an invoice
a tenant
a landlord
self-employed
substandard work
breach of contract
to turn up
to earn a living
bankrupt
a bailiff
a battle
a solicitor
a bill
conveyancing
a mortgage lender
to borrow
a formal written warning
loopholes
clamp down
accounting
to sign and date
to sack / to fire
straight away
income
to take to court
small claims court
to take out a loan
legal interest in an asset
a claim
to hold by a third party
to seize
outcome of a case
hasn’t paid a penny
sold at auction
to follow up
to carry out
to chase up
a matter
to draw up
ownership
a total sum
to purchase
to squeeze in
MPs
extent of
to deflect
foreseeable future
wrongful
an installment
to draw conclusions
a deposit
specific performance
bits and pieces
a stamp duty
the facts
to complain
to award
to go ahead
interest and costs
to struggle
a Charging Order
to enforce a judgment
to draw a line under
to draw a line under something
to cover
to threaten
damages or losses
to blame
See your level in just 5 minutes.
We can teach you legal English.
About the Author
Eric Froiland
Eric is a legal English teacher from the United States and has been based out of Bogota, Colombia for the last 10 years. He is the owner and founder of Legal English Innovation SAS, which is recognized as the top legal English academy in Colombia and is an official Test of Legal English Skills (TOLES) examination center.
