Acquisitions: Signing and Closing

Signing and Closing of a Business Acquisition

In the final phase of a business acquisitions final terms are negotiated, contracts are formalized, and ownership of the target company is transferred from the seller to the buyer. During this phase, it is ensured that both legal and financial aspects of the acquisition are clarified and managed, and examples of elements in this phase include:

Final hearing

During the final hearing, all previous negotiations are concluded, and the parties ensure they agree on all terms of the deal. This includes dealing with any remaining issues and confirming that both parties are happy with the agreement. It is important to ensure that there are no misunderstandings or unresolved issues before the agreements are formalised.

Review of agreements

A complete review of all relevant documents before they are signed. This can include share transfer agreements (often abbreviated SPA), shareholder agreements (often abbreviated SHA), financing agreements, employment contracts, and other important legal documents. Carefully reviewing and understanding the meaning of these documents ensures that all terms and conditions are clearly articulated and that both parties understand rights as well as obligations.

Legal compliance

Before the transaction is completed and the buyer accesses the shares, it is checked that all legal requirements are met. This may include that the necessary permits and approvals have been obtained, that laws and regulations are complied with, and that no legal obstacles stand in the way of the transaction. Legal advisers have an important and central role in ensuring that all aspects of the deal are considered and managed.

Signing of a contract (signing)

After all the documents have been reviewed and all the conditions have been agreed, the formal signing of the agreements takes place. This is the point at which the parties formally bind themselves to the transaction. The signing marks the transition from negotiation to implementation.

Access (Closing)

The day of admission, or closing in English, is the official transfer of ownership from the seller to the buyer. On this day, any side agreements such as shareholders' agreements, employment contracts, etc. are also signed and the purchase price is paid. This is the final and most formal part of the acquisition process, where the deal is finally consummated. In some cases, signing and closing take place simultaneously, in other cases they take place at different times depending on whether, for example, there are commitments to be fulfilled before access, whether there are regulatory issues to deal with and the choice of purchase price mechanism.

At FLB Partners, we offer expertise and support throughout the acquisition process, from strategic planning to integration. Contact us today to discuss how we can help your company with the acquisition process.