Disclosure letter in M&S transaction
Today’s post is on disclosure letter in M&A transaction. A disclosure letter sets out the exceptions to seller’s representations and warranties in a sale and purchase agreement for an M&A transaction (“SPA”). Instead of negotiating heavily on sellers’ representations and warranties in SPAs, it is common to provide in SPAs …
What approvals and notifications required for M&A transactions?
At the start of a M&A transaction, ascertaining the approvals and notifications required for the transaction would help you plan the workflow and timeline. The approvals and notifications required typically relate to change of control, shareholders, shareholding or directors of the target company. The approvals and notifications required for the …
Three stages in drafting M&A SPA
I learn drafting sale and purchase agreement (SPA) for M&A in the “traditional” manner. This is probably how instructions are given to associates when they are asked to draft SPA. *** We are acting for ABC who wants to buy/sell shares in XYZ Company. [Some briefing on the transaction.] Please …
“Fundamental” representations and warranties in M&A
Today’s post is on creating a category of ‘fundamental representations and warranties’ given by sellers in sale and purchase agreements (SPAs) for M&A transactions. It is common for sellers to give representations and warranties for the benefit of buyers in M&A transactions. Instead of negotiating heavily on the representations and …
Be clear with timeline in M&A SPA
Today’s post is on interpretation of time in a sale and purchase agreement for M&A transaction. Consider the following clause: “The Seller shall fulfil the Conditions Precedent no later than 90 days from the date of this Agreement.” Questions for you to consider: 1. Do the 90 days stated in …
Define terms in M&A SPA to avoid dispute
Today’s post is on some of the terms used in sale and purchase agreements for M&A transactions. The following terms are open to interpretation if used in agreements without being defined: 1. Family Does “family” mean immediate family or extended family? Do the parties to the agreements intend for the …
All in a day’s work of a M&A lawyer
One of the M&A negotiations I had took place during a fire drill. We were not notified in advance that there would be a fire drill in our office building that day. My colleague and I were in the midst of a con call when the fire alarm went off. …
Representations and warranties seller should avoid
Today’s post is on some of the representations and warranties a seller should avoid giving in a M&A transaction. 1. Representations and warranties about the future The seller should avoid providing representations and warranties in respect of future events if there is uncertainty about the future. Further, after the seller …
How buyers could secure claims in M&A transactions
Today’s post is on how a buyer may “secure” warranty and indemnity claims in M&A transactions. If the buyer is unable to recover damages from the seller for any warranty or indemnity claim due to the seller’s financial position, well-drafted clauses would not be much use to the buyer. If …
Key milestones for M&A transactions
A question was posed on a M&A transaction I was working on. Can the sale and purchase agreement be completed soon after the legal due diligence on the target company is completed? The short answer is “It depends”. There are things which are within lawyers’ control such as when draft …