The Cloven Business: Legal Complexities of Carve-outs in a Business Divestment Context

Camelia Gardot, Senior Legal Counsel, Airbus, France

Many companies decide to divest full business divisions or units, spanning a whole range of economic activities, as part of their strategic portfolio review. The motivation is not always the low profitability or poor performance of such businesses, but an attempt to focus on core business and enhanced competitiveness. Cash generated through such divestments could be invested in consolidating and developing the critical parts of the business and would allow the company to grow with its most strategic markets and customers. Such M&A transactions which involve separation of businesses highly integrated in the seller’s organization, are usually more complex than typical deals where the shares stock or the assets of one or more stand-alone entities are being sold /acquired. This paper aims to help the reader understand the main challenges and key success factors to consider in a complex carve-out project in order to maximize value and minimize risks for both the seller and the purchaser and particularly: • How to set –up a consistent carve-out plan • How to secure the proper and timely implementation of the carve-out and ensure the sold business is able to operate autonomously, whilst avoiding major disruptions, unforeseen costs and integration delays • How to structure the business purchase/sale agreement (“SPA”) to cover carve-out specific risks

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France Mergers & Acquisition Aviation March 2018 Vol.11, No. 42, Winter 2018

Camelia Gardot

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Camelia Gardot is Senior Legal Counsel – “Mergers and Acquisitions” at Airbus (Defence and Space Division) Practicing as in-house counsel for more than 13 years (mainly with aviation and aerospace companies), she has extensive legal experience in the areas of intellectual property, corporate matters comprising of international and French commercial transactions, corporate governance, mergers and acquisitions. She holds a Master’s degree in international business law from the University of Toulouse (France) and a “Mergers and Acquisitions” Diploma from the College of Law of England and Wales.

Airbus

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Airbus is the largest aeronautics and space company in Europe and a worldwide leader in three sectors: • Commercial Aircraft: Airbus is at the forefront of the aviation industry, building innovative commercial aircraft and consistently capturing about half of all commercial airliner orders. • Defence and Space: the 2nd largest space company in the world and top 10 defence company which provides tanker, combat, transport and mission aircraft as well as space systems, equipment and services. • Helicopters: the world’s leading helicopter manufacturer offering the most comprehensive range of civil and military helicopters in the world.

France Mergers & Acquisition Aviation March 2018 Vol.11, No. 42, Winter 2018