M&A – Mergers & Acquisitions: Significance and Opportunities in Switzerland

Companies with sufficient liquidity can use M&A to strategically expand into new markets or strengthen their position in existing ones. Acquiring a suitable company creates immediate synergies that help utilize resources more effectively and improve efficiency.

In the context of M&A, synergies refer to the positive effects that arise from the merger or acquisition of two companies. Synergies can be financial (e.g., cost savings) or strategic, such as access to new technologies or markets. These synergies result from more efficient use of shared resources, process optimization, cost reduction, or expanded market opportunities. The goal is for the combined company to be more valuable and perform better than the two companies operating separately.

Typical forms of M&A include mergers, spin-offs, share or asset purchases, joint ventures and carve-outs.
The type of transaction is determined by the strategic goals of the companies involved:

• Mergers:
  Two companies combine to form a new entity. This is especially common among mid-sized firms. The buy side plays a crucial role in the success of the merger.
• Spin-offs:
  A company separates part of its business to focus more strongly on its core operations or to release capital.
• Share or Asset Purchases:
  Companies acquire specific shares or assets to expand their portfolios or tap into new market opportunities.
• Acquisitions:
  One company acquires another. This type of transaction is often financed by private equity. A common example is a management buyout, where the company’s management takes over ownership.
• Joint Ventures:
  A joint venture is a form of business collaboration where two or more independent companies partner for a shared project or goal. Joint ventures enable companies to enter new markets with a partner, which might be difficult to access alone, while retaining control over their core business.
• Carve-outs:
  Companies sell off parts of their business to free up capital or realign their strategic focus.

A successfully executed M&A process requires thorough planning and consists of several phases:

1. Strategy Development
   Companies define clear objectives, such as achieving synergies or gaining market access.
2. Target Selection
   Potential acquisition targets are identified and subjected to thorough due diligence to uncover any financial, legal or operational risks associated with the potential purchase or sale.
3. Negotiations and Letter of Intent (LOI)
   Based on the analysis, negotiations take place and are documented in a Letter of Intent, outlining the key terms and conditions of the transaction.
4. Closing the Transaction
   After negotiations, the M&A deal must be legally completed before post-merger integration can begin. In Switzerland, closing is typically finalized with the entry into the Commercial Register.
5. Post-Merger Integration
   In the final phase, successful integration of the merged or acquired companies is crucial to realizing the anticipated synergies and ensuring a smooth alignment of operations and cultures.

Significance for SMEs in Switzerland
M&A transactions are not only relevant for large corporations. Small and medium-sized enterprises (SMEs) also use M&A to enter new markets and increase efficiency through mergers. However, the risks associated with selling a business must be carefully considered—especially for SMEs.

M&A transactions are complex and require professional guidance:

• M&A Advisors: They guide the entire process—from identifying potential targets to supporting post-merger integration.
• Financial Advisors: They determine a fair company valuation and help minimize financial risks.
• Lawyers: Lawyers play a central role in M&A transactions by ensuring all legal requirements and regulations are met.

In particular, lawyers’ responsibilities begin in the due diligence phase, where they assess the legal status of the target company to identify potential risks, such as existing legal disputes, contracts, or regulatory issues. They also draft and negotiate key transaction documents, such as the purchase agreement, which defines the terms of the deal.

In addition, lawyers ensure compliance with competition laws and help obtain any required regulatory approvals. They also advise on the tax and structural aspects of the transaction to avoid legal pitfalls and protect their clients’ interests.

Legal Framework – The Swiss Merger Act

The Federal Act on Merger, Demerger, Transformation, and Transfer of Assets (Merger Act, FusG) of October 3, 2003, governs the legal framework for most processes related to M&A transactions in Switzerland.

The Merger Act is divided into four main sections:

• Mergers (Art. 3–28 FusG)
• Demerger (Spin-off/Split) (Art. 29–52 FusG)
• Transformation (Art. 53–68 FusG)
• Transfer of Assets and Liabilities (Art. 69–77 FusG)

The requirements under the Merger Act vary depending on the purpose of the transaction and the legal form of the entities involved. If certain conditions are met, the law provides for special provisions and exceptions to simplify the procedures.

A key advantage of the Merger Act is the possibility of universal succession in certain types of transactions. This means that assets—including rights and obligations—can be transferred directly to another company without individual assignment. In the case of a transfer of assets, this presents a significant simplification compared to a traditional asset deal. Under the Merger Act, for example, parts of a business—including contracts, personnel, and real estate—can be transferred in a single legal step.

However, the Merger Act also sets clear procedural requirements. The entire restructuring process is formalized and requires transparent documentation, such as a transfer agreement and disclosure in the commercial register. This results in a reduction of confidentiality, which must be taken into account—especially in sensitive transactions.

The protection of creditors is also explicitly regulated. Creditors may demand security or raise objections if they believe their claims are at risk.

Tax and VAT implications are also critical when applying the Merger Act—especially in the transfer of business assets.

M&A represents a valuable strategic option for companies of all sizes to expand their market presence, achieve efficiency gains, and remain competitive in the long term.

The success of such transactions depends heavily on thorough planning, detailed due diligence, and smooth post-merger integration.

Whether it’s about growth through acquisitions, optimization through mergers, or releasing capital through the sale of company shares – M&A processes offer numerous opportunities but require in-depth expertise and careful execution.

In the coming years, the importance of M&A in Switzerland is expected to continue growing. In particular, the technology, financial, and healthcare sectors will see increased M&A activity. Carve-outs and buyouts—where companies divest or acquire specific business units—are emerging as strong trends. Foreign buyers are also showing significant interest in Swiss companies.