An M&A agreement is a legally binding contract that defines the terms and conditions governing the purchase or merger of one company by another. The primary purpose of an M&A agreement is to outline the rights, responsibilities, and terms of the transaction between the buyer and the target company, ensuring a smooth and well-defined process for the sale or purchase agreement.
Key components of an M&A agreement include the transaction structure (whether it's a merger, acquisition, or other structure), the purchase price, conditions that must be met before closing, representations and warranty agreements about the target company's status, covenants detailing the actions and obligations of both parties, indemnification clauses to address liabilities, employee-related matters, and the closing and mutual termination procedures.
M&A agreements typically contain dispute resolution mechanisms to address conflicts that may arise during or after the transaction. These mechanisms can include negotiation, mediation, or arbitration, depending on the preferences of the parties involved. The agreement will specify the chosen method for dispute resolution and the process for initiating and conducting these proceedings to ensure a structured and fair resolution process. You can also explore free contract templates exclusively made for business and professional purposes by Legitt team.