How the the acquisition process may affect the commercial success of the above transactions and critically analyse how law, legal processes or contractual obligations would, if at all, mitigate those commercial risks:
Enzymatic Limited is a UK company owned by a Professor, the University of Womble and a venture capital firm, Vintage Capital, as per the exercise we undertook in the module. The shareholding is: 30%, 30% (professor and University) and 40%Vintage. It now has a patented technology which can transform 70 % of the corn into LCE (see the module note).
It wants to expand by purchasing a French biofuel manufacturer with specific knowledge of second generation biodiesel to complement its second generation bioethanol capability. The rational for the deal is that oil companies who are the main customers for biofuel producers need both bioethanol and biodiesel as substitutes respectively for petrol and diesel.
Enzymatic is in advanced negotiations with Normale-Huile, a private French company which is similarly a university spin out (owned by ae French research institute, the Ecole Normale, a Professor Rene Dubois and an investment firm, Leclerc). The Sellers jointly own certain patents for the development of biodiesel from algae. The algae is genetically modified by the technology contained in a patent to produce a substance similar to biodiesel which patent-protected chemicals then transform to biodiesel. The intention is that the Sellers and the Buyers transfer to a new entity (Newco) based in the UK some or all of their relevant IP rights to Newco.
Critically analyse how the following issues may affect the commercial success of the above transactions and critically analyse how law, legal processes or contractual obligations would, if at all, mitigate those commercial risks:
The acquisition process (40% of the marks)
- The sources and nature of the legal advice that would be sought and in relation to what issues, and the related issues of ‘Law and Jurisdiction’.
- Consideration should also be given to the business structures of the new company that will be formed in the UK. A discussion of the different business structures is needed. (questions ii and iii together 20% of the marks).
- Image the IP was being licensed to Newco, is not transferred as above, what issue would this raise? (40% of the marks)
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