Mergers & Acquisitions

Mergers and acquisitions is an umbrella term for transactions where ownership of a business changes hands. A merger combines two entities into one, while an acquisition sees a buyer purchase a target outright. Deals may also take the form of disposals (selling a division), management buyouts (MBOs), or joint ventures. Private M&A — where neither party is publicly listed — accounts for the vast majority of deal volume and is where most junior lawyers cut their teeth. Public M&A, governed by the Takeover Code, attracts the headlines but follows a distinct, more rigid procedural framework.

A typical private acquisition moves through several stages. It begins with origination — a client deciding to buy or sell — followed by preliminary negotiations and the signing of a non-disclosure agreement (NDA). The buyer then conducts due diligence: a forensic review of the target's contracts, litigation exposure, regulatory position, and finances. Once the parties agree on commercial terms, lawyers draft the core transaction documents, negotiate protections, and progress towards signing. If the deal has conditions — such as regulatory clearances — there will be a gap before completion, when legal title and funds actually transfer.

SPA (Share Purchase Agreement)

The primary contract governing the sale and purchase of shares in a target company, setting out price, warranties, and completion mechanics.

Due Diligence

The investigation process where a buyer examines a target's legal, financial, tax, and commercial position before committing to a transaction.

Warranty

A contractual statement of fact by the seller about the target company — if untrue, the buyer may claim damages for the resulting loss.

Indemnity

A pound-for-pound reimbursement obligation for a specific identified risk, offering stronger protection than a warranty claim.

Completion Accounts

A price adjustment mechanism where the final purchase price is determined by accounts drawn up shortly after completion, reflecting the target's actual financial position.

Locked Box

An alternative pricing mechanism where the price is fixed by reference to a set of accounts at an agreed date before signing, with protections against value leakage.

Condition Precedent

A requirement that must be satisfied (e.g., regulatory approval) before the parties are obliged to complete the transaction.

Material Adverse Change (MAC)

A clause allowing a buyer to walk away if a significant negative event affects the target between signing and completion — heavily negotiated and rarely invoked.