| G |
M&A Term | Definition | Note |
GAAP | Generally Accepted Accounting Principles. For pensions accounting in the UK, GAAP will be FRS17 and in the US FAS87. | N6 |
GAAP | Short for “generally accepted accounting principles”. | N2 |
GAAP | generally accepted accounting principles. See also IFRS. 1. (US) US GAAP refers to GAAP in the United States. US GAAP represents a set of authoritative standards for recording and reporting accounting information and is the standard by which US companies report their Financial Statements. 2. (UK) UK GAAP refers to GAAP in the United Kingdom and is the standard by which many UK companies report their Financial Statements, although IFRS is also commonly used (and required for all European Public Companies) 3. (FRA) French GAAP refers to GAAP in France and is the standard by which French companies report their Financial Statements, although IFRS is also commonly used (and required for all European Public Companies) |
N1 |
GARP | Growth at right (or reasonable) price; a description of the approach some fund managers use to identify potential share purchases. | N6 |
GCC | Gulf Cooperation Council, a union of the following Arab States: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE | N1 |
GDP | See gross domestic product | N6 |
Gearing | a. From an accounting point of view, the amount of a company’s total borrowings divided by its share capital. High gearing means a proportionately large amount of debt, which may be considered more risky for equity holders. b. In investment analysis, a highly geared company is one where small changes in underlying conditions produce big swings in profits. Gearing can be financial or operational, if, for example, a company has large fixed overheads. |
N6 |
Gearing | the amount of borrowing/debt in relation to equity | N5 |
Gearing | the ratio of debt to equity capital. See also Leverage. | N1 |
GEM | the Growth Enterprise Market; along with the Main Board, one of the two Securities markets operated by the Hong Kong Stock Exchange | N1 |
GEM Listing Rules | in Hong Kong, this is a reference to the “Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited” | N1 |
General Disclosure | Principle according to which the buyer’s knowledge in relation to all documents and information contained in the Data Room (or otherwise disclosed) is assumed. In many cases, (only) the Data Room Index is included in an appendix to the sale and purchase agreement for this purpose. The specific circumstances that limit the seller’s representations (Specific Disclosure) are not mentioned. In this scenario, the buyer bears the risk – which is dependent on data quantity and quality – of having overlooked something during Due Diligence. The buyer can reduce this risk by agreeing Fair Disclosure with the seller. | N2 |
General Disclosures | qualify Representations and Warranties by reference to matters appearing in specified public records and/or of which the Buyer ought to be aware on the basis of Due Diligence documents, inquiries or searches | N1 |
General Offer | another term for a tender or Exchange Offer for all outstanding common Shares of a Target Company 1. (HKG) a generic term that covers both Mandatory General Offers and Voluntary General Offers. Also known as GO. |
N1 |
General Partner | A partner in a Limited Partnership. The general partner has unlimited liability. | N2 |
General Partner | a partner in a Partnership which may have personal liability for the liabilities and obligations of the Partnership (but see Limited Liability Limited Partnership). If a Partnership is not a Limited Liability Partnership or a Limited Partnership, its Partners will be General Partners by default. | N1 |
general partner (private equity) | Manager of the limited partnership — typically the investment manager. (See limited partnership [private equity].) | N6 |
German Corporate Governance Code (DCGK) | According to the commission responsible (Regierungskommission Deutscher Corporate Governance Kodex) (www.corporategovernance- code.de), the purpose of the Code is to make German regulations on corporate management and supervision transparent to German and international investors, with the aim of boosting trust in the way German companies are run. The DCGK consists of three types of provisions. Firstly, the DCGK refers to statutory regulations that companies are already obliged to comply with. Secondly, the Code sets out recommendations, to which the Comply-or-Explain Procedure applies. These recommendations are identified by the use of the word “shall”. The DCGK also includes suggestions; no disclosure is required if these suggestions are not followed, i.e. the comply-or-explain procedure does not apply. Suggestions are identified by the use of the words “should” and “may”. | N2 |
German Foreign Trade Law and Regulations (Aussenwirtschaftsgesetz, Aussenwirtschaftsverordnung) | pursuant to these rules a certificate may be required by the German Federal Ministry of Economics and Technology (Bundesministerium für Wirtschaft und Technologie). See also Foreign Investment Rules. | N1 |
German Takeover Code | the Takeover of Listed Companies in Germany has been regulated since 2002 by the German Takeover Code (Wertpapiererwerbs- und Übernahmegesetz, WpÜG). The Takeover Code supplemented by a set of rules, stipulates in detail the lower limit of the Offer price for a Takeover Offer. | N1 |
gilt (-edged) | Bond issued by the UK government. The payments on the gilt may be either fixed (fixed-interest gilt) or increase with inflation (index-linked gilt). So called because certificates used to be gilt-edged. | N6 |
gilt repo | Practice of selling gilts and simultaneously entering into an agreement to repurchase them at a fixed time and price. A technique used to fund temporary cash shortfalls and long gilt positions, or to gear portfolios by borrowing against gilts. Buying gilts with a resale agreement is called a reverse and is a means of lending cash on a collateralised basis. | N6 |
gilt strip | See STRIPS. | N6 |
GIPS™ | See Global Investment Performance Standards. | N6 |
Giveaway | Negotiating position that a party is willing to give up during negotiations, e.g. because it expects that the other side will be willing to compromise on another point in return. | N2 |
Give-Get | another name for a Has-Gets financial analysis for a Stock-for- Stock Acquisition | N1 |
Glass Lewis | the second largest Proxy Advisory Firm, currently owned by the Ontario Teachers’ Pension Fund | N1 |
Global Investment Performance Standards (GIPS™) | Set of minimum performance presentation standards for investment managers. Maintained by the CFA Institute and intended for global use. | N6 |
global tactical asset allocation | Form of tactical asset allocation that employs derivatives, among other strategies, to take positive and negative positions on equity and bond mandates and currencies that the manager’s research indicates are relatively attractively/unattractively valued. | N6 |
GNP | See gross national product. | N6 |
GO | acronym for General Offer | N1 |
Go Shop | provisions sometimes contained in Public Company Merger Agreements which delay the beginning of the No Shop provisions for a specified period of time (e.g., 30-60 days). During a Go Shop period, a Target Company is contractually free to actively solicit Competing Bids. Terms of Go Shop provisions vary, including the duration of the Go Shop period and the reduction, if any, during the Go Shop period of the Termination Fee. Go Shop provisions are most commonly found in Public Company Merger Agreements where there has not been a significant Market Check preceding the Target Company’s Board of Directors approval of the Public Company Merger Agreement. Go Shop provisions are also more common in transactions where the successful Bidder is a Private Equity Sponsor. | N1 |
Go-shop Clause | A go-shop clause can be used in a Sale and Purchase Agreement enables the Target to look around for a better deal (for a limited period). In such a case, the Target has the right to withdraw from the contract, often in exchange for a Break-up Fee. | N2 |
Go-along Obligation | Drag-along Right. | N2 |
GoB | Refers to the principles of proper accounting (Grundsätze ordnungsmäßiger Buchführung) in accordance with the German Commercial Code (HGB) (see also GAAP); the GoB are often referred to and defined as “German GAAP” in English language contracts. | N2 |
Going Concern | an ongoing operating business enterprise | N7 |
Going Concern Principle | Principle used in company valuations. It assumes that the business will be continued and values the company on that basis; this assumption no longer applies if there is a risk of insolvency. | N2 |
Going Concern Value | a Premise of Value that assumes the business is an ongoing commercial enterprise with a reasonable expectation of future earning power. | N7 |
Going Private | See Delisting; going private is often preceded by a Squeeze-out. | N2 |
Going Private | in its broadest meaning, Going Private refers to the elimination of all public ownership in a Public Company. This usage overlaps with the term Take Private, and many use the two terms interchangeably. A more precise usage of the term Going Private is to describe a transaction by which a Controlling Shareholder of a Public Company acquires all of the public shareholders’ Equity Interests. 1. (US) a related and more technical meaning is a transaction meeting the definition of a “going private transaction” in SEC Rule 13e-3 under the 1934 Act. The term Going Private is also sometimes confusingly used to describe a transaction in which a publicly held corporation de-registers its Securities due to the number of shareholders falling below the applicable SEC Threshold. |
N1 |
Going Public | Stock market flotation of a company (IPO). | N2 |
Gold in the Backyard | Term describing a situation where factors subsequently become known that substantially increase the value of a company, such that the management board can make use of its Fiduciary Out right and is no longer required to recommend that shareholders accept a bid. | N2 |
Golden Handcuffs | a term often used to broadly describe employment incentive arrangements designed to ensure an employee does not leave a business | N1 |
Golden Handshake | Severance payment made to a party to a contract, generally a senior manager or Key Employee, if the contract is terminated prematurely (see also Golden Parachute). | N2 |
Golden Handshake | agreement between a company and a member of the Management which connects the termination of employment with a substantial financial settlement | N1 |
Golden Parachute | Contractual provisions in which a senior manager (or Key Employee) is promised what is usually a substantial severance payment in the event that the employment contract is terminated (under certain conditions) (see also Golden Handshake). | N2 |
Golden Parachute | provisions in an employment or Change of Control agreement for Parachute and severance pay in the event the employer is acquired in a transaction resulting in a Change of Control. Frequently, these provisions have a Single Trigger Parachute or Double Trigger Parachute which also requires the employee be involuntarily terminated within a specified period following the Acquisition. A Golden Parachute commonly provides for severance pay in a Multiple of base pay (and usually cash bonus), such as twice as much (2x) or three times as much (3x) as well as continued medical and other benefits; hence the adjective “golden” to describe the arrangement. Golden Parachutes also typically provide for Stock Option Acceleration, Stock Appreciation Rights, Restricted Stock Units, removal of restrictions on all Restricted Stock, payment of enhanced pension benefits (often pursuant to Supplemental Employee Retirement Plans, or SERPs) and 280G Gross Up provisions. 1. (FRA) under French Law, Golden Parachute entitlements in Listed Companies are subject to performance criteria established by the Board and the payment of the Golden Parachutes is subject to Board verification that the established criteria or targets are met. Such decisions must be publicly disclosed by the Board. |
N1 |
Golden parachutes (or) first class passengers strategy | This envisages a generous termination package for senior executives and is used as a protection tool against a takeover | N3 |
Good Faith | acting honestly and fairly towards one’s counterparties. Similar to acting reasonably. Good Faith is also a critical component of a director’s Duty of Loyalty. | N1 |
Good Leaver | A Leaver who (usually) leaves the company or management team for reasons for which he is not responsible (e.g. death, long-term incapacity). Other circumstances may also be defined by contract as good leaver cases. A good leaver generally receives a higher severance payment than a Bad Leaver or, if the shares held by a good leaver are subject to a Call Option, is entitled to a higher purchase price than a bad leaver. | N2 |
Good Leaver | a manager who holds Shares of the company and leaves his/her office in consent or without being terminated for good cause. When a person ceases to be an employee of a company, a Good Leaver will usually mean leaving employment on grounds of death or disability and a Bad Leaver will usually mean leaving in circumstances connected with employee dismissal. The concept of Good Leaver/Bad Leaver is sometimes used to determine the Acquisition price of the Shares held by the manager or employee. | N1 |
Good-faith Talks | Escalation level in the context of a Multi-tiered Clause for alternative dispute resolution. It requires the parties to discuss the disputed issues in a spirit of compromise. | N2 |
Goodwill | an Intangible Asset which represents any future economic benefit arising from a business or a group of assets which is not individually identified or separately recognized. Goodwill can arise as a result of name, reputation, customer loyalty, location, products and similar factors not separately identified. In the context of a business combination, goodwill is measured as the difference between (A) the aggregate of (i) the value of the consideration transferred (generally at Fair Value), (ii) the amount of any noncontrolling interest, and (iii) in a business combination achieved in stages, the acquisition-date Fair Value of the acquirer’s previously held equity interest in the acquiree, and (B) the net of the acquisition-date amounts of the Identifiable Assets acquired and the liabilities as assumed | N7 |
Goodwill | The difference between the price paid for a business and the value of its assets. Goodwill represents intangible assets that are not separately identifiable for example the business name or trademarks, the quality of the customer base or its position in the industry. Goodwill is a tricky area for valuation as it is highly subjective. It is also possible to have negative goodwill. | N5 |
Goodwill | the difference between the price paid for the shares and the book value of the equity of the company. | N4 |
Goodwill | the difference between the price paid for the target and its book value | N3 |
Goodwill | An intangible asset that represents a value over and above the physical assets of a business. A company’s reputation and standing in the market are typical factors that contribute to its goodwill. Goodwill may be included when calculating the purchase price. | N2 |
Goodwill | the value of intangible assets on a company’s Balance Sheet. Goodwill includes the business’s reputation, contacts and intellectual property; the reason why you buy Coke over Pepsi (or vice versa). | N1 |
governance | Describes the organisation, control and administration usually carried out by a body or committee. | N6 |
Governing Law | The law applicable to a contract, usually specified in a choice of law clause. Examples include German law, the law of England and Wales, and the law of the American state of Delaware. | N2 |
government bond | Bond issued by a government. In the UK these are called gilts. | N6 |
GP/General Partner | in order to maintain the limitations in liability as a limited partnership, a fund must also have a general partner who has unlimited liability. The general partner is associated with the management company of the investment fund. | N4 |
Grace period | the period during which no interest payments and/or debt repayments need to take place | N4 |
Grace period | the period during which no interest or debt payments payments are due | N3 |
Greeks | Set of financial ratios pertaining to derivative valuation, designated by the Greek letters delta (Δ), gamma (γ), rho (ρ), theta (θ) and vega (ν). They are used to represent the factors that result in changes in value of a derivative contract. | N6 |
green investing | Investment which actively considers a company’s effect on the environment. | N6 |
greenback | Colloquial term for the US dollar. | N6 |
Greenmail | A large block of shares is held by an unfriendly company, which forces the target company to repurchase the stock at a substantial premium to prevent the takeover | N3 |
Greenmail | a once common method of getting rid of an Activist Investor in which the Target Company would purchase the Investor’s block of Target Company Stock at a price above market and enter into some form of settlement or Standstill agreement with the Activist Investor. This practice became very controversial in the late 1980s and provoked legislation as well as institutional Investor backlash. As a result, Greenmail is rarely practiced in its traditional form. 1. (FRA) such method is prohibited in France because it would violate the equality of treatment among shareholders | N1 |
Greenshoe (of over-allotment option) | option reserved for the selling shareholders to increase the number of shares offered in an IPO by a fixed amount in the event of oversubscription | N4 |
Grey knight | A party friendly to the target company who seeks to take over the predator | N3 |
gross asset value (real estate) | Sum total of property values held in portfolio (See also net asset value [real estate].) | N6 |
gross domestic product (GDP) | Total market value of finished goods and services produced in a country in a given year. | N6 |
gross national product (GNP) | Gross domestic product with the addition of income from abroad by domestic residents, minus income earned in the domestic markets accruing to foreigners abroad. | N6 |
Gross Up | a provision in an agreement which increases the amount of a specified payment so that, after payment of all applicable taxes owed by the recipient resulting from the payment, the recipient receives what it would have received if the payment had not been subject to the applicable taxes. A Tax Gross Up historically was very common in Parachutes, but under pressure from institutional Investors and Proxy Advisory Firms, has largely been eliminated from new Parachutes and has been negotiated out of many older Parachutes. A Tax Gross Up in loan agreements generally protects Lenders which are not otherwise subject to tax in the Lender’s jurisdiction from the possible imposition, after the Closing Date, of Withholding Taxes by a taxing authority. | N1 |
Gross-up Clause | Under a gross-up clause, a payor must pay an additional amount to a payee to ensure that the payee receives and retains the same amount that it would have received had no tax been withheld from, or otherwise been due as a result of, the payment. | N2 |
Group | generally when two or more persons agree to act together for the purpose of buying, holding, voting or disposing of a company’s Securities. Proving when persons have actually formed a Group versus when persons just happen to all be taking similar actions at similar times can be difficult. See L&W M&A Commentary —CSX: Opportunities and Implications for Companies and Activist Investors (June 2008). See also Acting in Concert and Bidder Group. | N1 |
Growth Capital | see Development Capital | N1 |
growth fund | Fund that has the aim of achieving capital appreciation, typically an equity portfolio that has the aim of achieving capital appreciation by investing in growth stocks. | N6 |
growth investor/manager | Investor who seeks out growth stocks. | N6 |
growth stock | Stock that is expected to achieve above average earnings growth. Growth stocks normally have a high P/E ratio relative to the market as a whole, as investors anticipate that earnings will increase in the future. | N6 |
growth style | Investment style focussing on growth stocks. | N6 |
Guarantee Limitation Language | in certain jurisdictions unlimited guarantees can be illegal or invalid, including because of Corporate Benefit of Financial Assistance prohibitions, and therefore a limitation language specific in each relevant jurisdiction may need to be inserted | N1 |
Guarantee on First Demand | See First Demand Guarantee. | N2 |
Guaranteed Delivery | a provision in Tender Offer or Exchange Offer documents which, in lieu of requiring physical delivering of the tendered Securities, permits a broker, dealer, bank or trust company to guarantee delivery on behalf of a customer. Not all Tender Offers and Exchange Offers permit a guarantee of delivery because they have been extremely difficult to enforce, often to the regret of the Bidder. | N1 |
Guarantees | in order to assure the buyer that the seller will fulfill its obligations, the seller may provide certain financial guarantees. This is the case if a claim is submitted on the basis of the representations and warranties or the indemnities. These guarantee stipulations are also valid for a specific period of time and may be limited to a specific amount of money. The most commonly used types of guarantee are the bank guarantee (upon first request or otherwise) and escrow. | N4 |
Guarantees | A guarantee provided by the seller, often in the form of a bank guarantee and escrow. The goals is to assure the buyer that the seller will adhere to his contractual obligations, as stipulated in the Sale and Purchase Agreement. These obligations are the so-called “”reps & warranties””: representations by managements, warranties given, indemnities fixed in time and often limited in amount | N3 |
Guarantor | Surety provider. | N2 |
Greenfield Method | a method used to estimate the value of certain Intangible Assets (e.g., franchise agreements or broadcast spectrum) based on the discounted cash flows of a hypothetical start-up business. The Greenfield Method assumes that the subject asset is the only asset of the business at the Valuation Date and that investments are made during the start-up period to purchase, build, or rent the other assets required to assemble the business. See also Contributory Assets, Excess Earnings Method, and Multi-Period Excess Earnings Method | N7 |
Guideline Transaction Method | a method within the Market Approach whereby the value of a business is estimated by application of Multiples derived from one or more transactions of Controlling Interests in companies engaged in the same or similar lines of business as the subject business. Sometimes known as guideline merger and acquisition method | N7 |
Guideline Public Company Method | a method within the Market Approach whereby the value of a business is estimated by application of Multiples derived from market prices of securities of publicly traded companies that are engaged in the same or similar lines of business as the subject business | N7 |
Reference
N1: referring to The Book of Jargon – Global Mergers & Acquisitions, first edition, the Latham & Watkins, available at https://www.lw.com/admin/Upload/Documents/BoJ_Global_MandA-locked-March-2015.pdf.
N2: referring to Glossary of Key M&A and Corporate Terms, 4th edition, Dr Anne Meckbach and Dr Tobias Grau, available at https://cms.law/en/deu/publication/glossary-of-key-m-a-and-corporate-terms-2020.
N3:referring to M&A Dictionary, Global PMI Partners, available at https://gpmip.com/dictionary/.
N4:referring to M&A jargon demystified, KPMG, available at https://issuu.com/kpmg_be/docs/kpmg_m_a_vakjargon_en_digital.
N5: referring to Simple Guide to M&A Terminology and Jargon, Lucas & Weston Ltd., available at https://uploads-ssl.webflow.com/5708da760dd2dc033a78bd13/5b7ea45f3dbc72645fbee4b2_L%26W%20-%20M%26A%20Glossary.pdf.
N6:referring to INVESTMENT DICTIONARY, MARSH & McLENNAN COMPANIES, available at https://www.mercer.com/content/dam/mercer/attachments/europe/Netherlands/ic-dictionary-mercer.pdf.
N7: referring to International Valuation Glossary—Business Valuation, November 2021, jointly published by ASA, CBV Institute, RICS and TAQEEM, available at https://www.appraisers.org/docs/default-source/default-document-library/international-business-valuation-glossary_en_final.pdf?sfvrsn=e37c69d4_2.
The above information is collected from the Internet and reorganized for the purposes of learning and sharing only and not for any other purposes. It can not be guaranteed to be error-free.