International M&A may be complex—but the right legal structure can make it far more manageable.
Whether acquiring a glass plant in Germany, a ceramic components shop in Korea, or a refractory distributor in Brazil, structuring the deal properly from day one is critical. The right legal entity structure determines how fast you close, how efficiently you integrate, and how cleanly you exit.
Here’s how to think through legal structuring for cross-border materials deals.
1. Asset vs. Share Purchase: Start with Tax and Liability Exposure
Asset purchase: Cleaner liabilities, step-up in tax basis, better for distressed or carve-out deals
Share purchase: Faster in countries with restrictive labor or transfer rules, preserves customer contracts and permits
🎯 Considerations:
Can licenses be transferred easily?
Will employees need to be re-hired under new contracts?
2. Use a Local Acquisition Vehicle Where Needed
In many jurisdictions, direct foreign ownership triggers:
Regulatory filings
Tax withholding complications
Delays in fund transfer or ownership registration
🎯 Solution: Set up a local “NewCo” in the target country—wholly owned by your holding company. This simplifies compliance and localizes tax reporting.
3. Address Currency Risk and Cash Repatriation Upfront
Cross-border deals often involve:
Currency exchange fluctuations between signing and close
Tax leakage when repatriating dividends or intercompany payments
Transfer pricing scrutiny
🎯 Strategy:
Lock in FX rates or use hedging instruments
Structure intercompany loans to manage repatriation and tax exposure
4. Pay Attention to Intellectual Property Transfer
In ceramics, refractories, and specialty glass, value often lies in:
Custom formulations
Proprietary processing methods
Trade secrets or customer-specific specs
🎯 Tip: Make sure IP assignments and licensing agreements are fully transferred—and that legacy employees sign IP protection clauses.
5. Understand Labor and Union Law Variations
Some countries mandate:
Advance notice to employees or unions
Job protection guarantees for 12–24 months
Severance based on tenure and job grade
🎯 Work with local counsel to avoid post-close surprises. Include employment reps in due diligence.
6. Clarify Post-Deal Governance and Reporting
Who controls what post-close? Define:
Board composition
Reporting cadence (monthly, quarterly)
Voting rights for strategic decisions
🎯 Even in 100% acquisitions, clarity here avoids friction between local and HQ leadership.
: The Right Legal Structure Makes International M&A Faster, Safer, and More Profitable
It’s not just about closing the deal—it’s about what happens after. Structure your acquisition for regulatory compliance, tax efficiency, and operational clarity. The smoother the structure, the faster you unlock value.
