Drafting letter of intent for entering into M&A deal

Before entering into M&A deal, counterparties should set forth their intention to conclude the transaction in writing. For this purpose, an agreement of intent is signed. You can specify the approximate terms of the future transaction, the procedure for preparing all necessary documents, the schedule of meetings of parties’ representatives as well as other terms and conditions at discretion of the parties.

Why is it necessary to sign a letter of intent?

First of all, letter of intent is necessary to pre-fix the terms and conditions of future transaction, meanwhile reserving the right to refuse from entering into it. For instance, it is convenient if the seller is negotiating with a few potential business buyers at the same time.

Secondly, a written agreement of intent can be used as proof that the parties actually have been negotiating the transaction. Also, LOI may be necessary if the parties have disagreements in execution of the main agreement, which was concluded on the basis of letter of intent. Thus, when interpreting the main contract, the court may also refer to the letter of intent in order to establish the actual general will of the parties.

Rules of drafting letter of intent

The letter may be drawn up in any form. As a rule, it indicates what kind of deal the parties plan to conclude and what needs to be done (preparation of documentation, carrying out a research, etc.).

The agreement may contain provisions on how to conduct negotiations (the dates of planned meetings of representatives, the procedure for allocating expenses, etc.). However, such an agreement should not include conditions that limit the parties’ liability for unfair actions.

In order not to be legally bound to conclude a contract, it is recommended to explicitly indicate in the LOI that it is not a preliminary contract and does not impose an obligation to conclude the main contract in future.

The agreement of intent may also provide for an exclusivity clause, according to which the party undertakes not to enter into negotiations on a similar subject matter with third parties within certain period of time.

VALEN Group lawyers can provide the full range of services related to entering into M&A transaction as well as preparation of letter of intent as the first stage:

  • drafting an agreement of intent considering all the client’s requirements;
  • assessment of documents provided by contractors, assistance in improving terms and conditions as well as negotiations with the other party;
  • development of additional documentation;
  • detailed consultations on any issues related to the conclusion of the agreement.

Lawyers

Andrey Toryannikov
Attorney at law, Counsel
Kirill Chemlaev
Senior Lawyer
Alexander Krylov
Lawyer
Valeria Zakharova
Lawyer
Maxim Verbov
Lawyer
Andrey Toryannikov
Attorney at law, Counsel

Two degrees in Lomonosov Moscow State University. Faculties of Law and Philology.

1996 – obtained status of attorney

Foreign Languages: English

Specialist in the field of legal representation, corporate conflict resolution, structuring and support of transactions for the acquisition of business, as well as defense / representation in the framework of criminal prosecution

1994 – has written more than 150 publications in the Russian newspapers and magazines

Since 2019 – Senior Lawyer at VALEN

Our specialists
Kirill Chemlaev
Senior Lawyer

Law degree in Kutafin Moscow State Law University (MSAL)

Foreign Languages: English

Since 2018 – Lawyer at VALEN

Our specialists
Alexander Krylov
Lawyer

Law degree in Lomonosov Moscow State University, 2014

Postgraduate education diploma in Institute of Legislation and Comparative Law under the Government of the Russian Federation, 2017

Foreign Languages: English, German, Spanish, Portuguese

Since 2014 – practice in obtaining and collecting of low liquid debts, in bankruptcy procedures of legal entities and litigation in commercial and regular courts

Since 2020 – lawyer at VALEN

Our specialists
Valeria Zakharova
Lawyer

Russian Foreign Trade Academy (LLB), 2017 international law faculty

University of Westminster (LLM), 2018 Faculty – corporate finance law

Foreign Languages: English, Spanish

Internships in public authorities (District Court, Russian Financial Intelligence Unit; English and Swiss law firms (Diacle Ltd, Froriep LLP)

Since 2019 – lawyer at VALEN

Our specialists
Maxim Verbov
Lawyer

Russian Foreign Trade Academy, Faculty – international law

Foreign Languages: English, French

Since 2020 – Lawyer at VALEN

Our specialists

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