Contents of a LoI - 12 Company acquisition - Step 3.4
We recommend negotiating the Letter of Intent / LoI in detail and thus establishing joint clarity for the subsequent purchase contract. This helps to prevent misunderstandings and to make the process safer on the decisive metres.
The following is an excerpt of the possible components: Designation of the contracting parties (incl. the possible company form), expression of interest in the implementation of the designated transaction, summary of previous discussion results, concretisation of the transaction project (what will be sold and how), price definition (if applicable, plus performance-related provisions, consultancy or employment contracts and remuneration), concrete timetable (preliminary DD, implementation DD, contract discussion, takeover/transfer), granting of power of attorney in favour of a party examining the object of purchase (e.g. within the scope of a due diligence), presentation of the financing structure of the buyer (bank confirmations, investor presentation, etc.), time limits, conditions, reservations, conditions of use, conditions for the purchase of the object of purchase (e.g. within the scope of a due diligence). (e.g. due diligence), presentation of the buyer’s financing structure (bank confirmations, investor presentation, etc.), time limits, conditions and reservations, confidentiality obligation with regard to the information received, definition of exceptions, sanctions in the event of non-compliance (contractual penalty), claim for surrender or destruction of documents received, reference to the lack of binding effect of the LoI, reasons for termination of the ongoing negotiations and arrangements for reimbursement of expenses.