A1) A company acquires another company for synergy creation and grow its business through economies of scale. Through this acquisition, Digion will have the opportunity to tap into a new market within the technology domain (I.e the gaming sector) and significantly increase its revenue, thereby giving Digion an added leverage to manage its operating costs. Digion can do this by using the extensive experience of Immersive’s co-founders Leon Alexander and Maria May who bring along with them extensive experience in game server hosting.
A2) Elena must get Tristan to sign a non-solicitation clause which prevents him from individually poaching/approaching employees of Digion. The clause must be drafted in a way which does not sound aggressive that it can provoke Tristan to take steps which can jeopardise the execution of the deal considering he holds an influential post in Immersive as vice president.
A3) This clause is mainly concerned with ensuring market integrity and the deal is executed in all fairness to both the buyer and seller. As a buyer, the clause categorically sets out the rights available to the buyer such as access to information of the seller’s business to conduct due diligence to ensure there are no ongoing complications that could potentially affect the deal. As for the seller, ensuring its stakeholders have given the green light to get the deal running, after considering all the necessary background checks and arranging all documents/information to be presented to the buyer. In terms of market integrity, ensuring the deal is well within the threshold to promote healthy competition in the market and there is no third party interference/any vested interest by anyone involved that can materially impact the terms & conditions of the proposed acquisition.
A4) A warranty in a sale and purchase agreement is basically the seller being transparent to the buyer through what is commonly called a ‘disclosure letter’. Therefore, acting for the seller, it is important to advice the seller to be completely transparent with the buyer about all commercial dealings and/or any confidential information which if not disclosed can compromise the seller’s position and can entitle the buyer to claim compensation from the seller for the potential losses. Therefore, by being completely transparent to the buyer, the seller can eliminate any situation of providing compensation as all the information would have already been presented to the buyer leaving the buyer with the decision to move ahead/forfeit the proposed acquisition.
A5) As English law is the universally accepted set of rules to govern commercial transactions which precedes any regional laws, it is practical for both parties to agree to the courts of England having exclusive jurisdiction over this deal as the courts will adjudicate the matter (if there is a dispute) based on English law without having to worry about geographical limitations .
