Acquiring a business: a guide to transatlantic M&A

This guide provides a comprehensive overview of the mergers and acquisitions process with a focus on cross-border transactions involving Bangladesh. We cover the essential aspects of M&A transactions to help you navigate the complexities of acquiring or merging with businesses across borders.

Our guide addresses the following key areas:

• Preparing for the acquisition process
• Key areas of focus for legal due diligence
• Understanding the market dynamics in Bangladesh and globally
• Warranty and indemnity insurance considerations
• Tax implications and planning strategies
• Antitrust and regulatory compliance
• Post-closing integration and considerations

Whether you're a corporate entity, private equity fund, or individual investor looking to expand through acquisitions, this guide provides valuable insights into the legal, financial, and strategic aspects of M&A transactions in Bangladesh and beyond.

The key to completing an acquisition efficiently is to make sure you know your objectives and can negotiate deal terms and execute quickly. Below are some key issues to consider.

In Bangladesh, M&A transactions are subject to various regulatory requirements, including approvals from the Bangladesh Securities and Exchange Commission, Bangladesh Bank, and other relevant authorities. TRW Law Firm's regulatory experts can navigate these requirements efficiently, ensuring compliance while minimizing delays.

The structure of your transaction will have significant legal, tax, and business implications. Options include share purchases, asset purchases, mergers, or joint ventures. Our M&A specialists can help you determine the most advantageous structure based on your specific circumstances and objectives.

Legal due diligence is a critical component of any M&A transaction. It helps identify potential risks, liabilities, and opportunities that may impact the deal's value and structure. Below are key areas that should be examined during this process.

Ensuring the target company complies with all applicable laws and regulations is essential for avoiding post-acquisition liabilities. This includes industry-specific regulations, environmental laws, data protection requirements, and anti-corruption laws.

Reviewing employment contracts, benefit plans, labor agreements, and compliance with employment laws helps identify potential liabilities and integration challenges. This is particularly important in cross-border transactions where employment laws may differ significantly.

The global M&A landscape continues to evolve, with several key trends shaping the market in 2025. Technology-driven deals remain a primary driver of M&A activity, with companies seeking to acquire technological capabilities and talent. Despite geopolitical tensions, cross-border M&A continues to be significant as companies seek global expansion and diversification.

Bangladesh's M&A market has shown remarkable growth in recent years, driven by economic growth, increasing foreign direct investment, regulatory improvements, emerging sectors, and family business succession challenges.

Key Commercial Differences Between Bangladesh and International M&A Norms

• Regulatory Environment: Bangladesh's regulatory framework for M&A is still evolving, with processes that may be less streamlined than in more developed markets.
• Due Diligence Challenges: Limited public information and varying standards of financial reporting can make due diligence more challenging in Bangladesh.
• Valuation Approaches: Valuation methodologies and expectations may differ from international standards, requiring careful negotiation and explanation.
• Cultural Factors: Business relationships in Bangladesh often rely heavily on personal connections and trust, which can influence negotiation dynamics.

TRW Law Firm's deep understanding of both Bangladesh's business environment and international M&A practices enables us to bridge these differences effectively, facilitating successful cross-border transactions.

Warranty and Indemnity (W&I) insurance, also known as Representations and Warranties (R&W) insurance in some markets, has become an increasingly important tool in M&A transactions. This insurance product provides coverage for breaches of warranties and indemnities given by sellers in sale and purchase agreements.

Benefits of W&I Insurance

When considering W&I insurance for transactions involving Bangladeshi companies, several factors should be taken into account, including market maturity, insurer comfort with Bangladesh's legal environment, coverage limitations, premium costs, and local law considerations.

TRW Law Firm has extensive experience in structuring W&I insurance for cross-border transactions involving Bangladesh, helping clients navigate these considerations effectively.

Tax plays a crucial part in deciding how you structure and finance your acquisition. Below we highlight some of the key factors to consider, many of which will be familiar to you as a buyer.

Global Tax Implications

Cross-border M&A transactions involve complex tax considerations across multiple jurisdictions, including transfer pricing, withholding taxes, permanent establishment risk, foreign tax credits, and anti-avoidance rules.

Bangladesh Tax Framework for M&A

• Corporate Income Tax: Standard corporate tax rates range from 25% to 37.5%, with variations based on industry and listing status.
• Capital Gains Tax: Capital gains from the sale of shares are generally taxable, with rates varying based on holding period and company type.
• Stamp Duty: Transfer of shares and assets may trigger stamp duty obligations, which should be factored into transaction costs.
• Value Added Tax (VAT): Certain transaction elements may be subject to VAT at 15%, though exemptions may apply.

TRW Law Firm's tax specialists work closely with our M&A team to develop and implement tax-efficient transaction structures that comply with all applicable laws while minimizing tax burden.

Antitrust and competition issues are currently governed by the Competition Act 2012 in Bangladesh. This legislation aims to prevent anti-competitive business practices, abuse of dominant position, and mergers that substantially lessen competition.

Bangladesh's competition law framework has several key elements relevant to M&A transactions, including merger control requirements, review processes by the Bangladesh Competition Commission (BCC), and potential remedies or penalties.

International Antitrust Considerations

Cross-border transactions may trigger antitrust review in multiple jurisdictions, requiring:

• Multi-jurisdictional assessment to identify all relevant filing requirements
• Coordination strategy for multiple filings to ensure consistency
• Timing considerations for different review periods
• Understanding of substantive analysis variations across jurisdictions
• Coordination of potential remedies across jurisdictions

To navigate antitrust considerations effectively in M&A transactions, it's important to conduct early assessment, develop a comprehensive filing strategy, be mindful of document creation, plan for confidentiality during due diligence, and carefully draft antitrust-related closing conditions.

TRW Law Firm's competition specialists have extensive experience in navigating Bangladesh's evolving competition regime and coordinating with international counsel on multi-jurisdictional filings.

The work doesn't end when the deal closes. Successful integration planning is essential to realize the full value of your acquisition. Below are key areas to focus on post-closing.

Establishing effective governance for the combined entity is essential, including determining the appropriate board structure, establishing clear reporting lines, aligning key policies, ensuring compliance, and implementing performance monitoring systems.

TRW Law Firm provides comprehensive post-closing support, helping clients navigate integration challenges and realize the full value of their acquisitions.

TRW Law Firm's M&A team combines deep local knowledge with global perspective. Our multidisciplinary approach brings together experts in corporate law, tax, employment, intellectual property, and regulatory compliance to provide comprehensive support throughout the M&A lifecycle.