Document background
The Business Acquisition Letter of Intent is a crucial preliminary document in German M&A transactions, typically used after initial discussions but before detailed due diligence and definitive agreements. It serves to memorialize the parties' preliminary understanding and commitment to pursue the transaction while establishing key parameters for negotiation. Under German law, special attention must be paid to clearly distinguishing between binding and non-binding provisions, particularly regarding confidentiality (Vertraulichkeit) and exclusivity (Exklusivität). The document typically includes preliminary terms on purchase price, transaction structure, due diligence scope, and timeline, while considering German-specific legal requirements such as merger control thresholds and employee rights under transfer of undertaking regulations. This document is particularly important in the German business context where having a clear written framework for negotiations is highly valued.
