Partnerblog
On 25 June 2026, Aubry Daerden (Partner), Ward Overlaet (Associate), and Anass Arbage (Associate) from the Brussels office of Crowell & Moring LLP presented a webinar titled “The M&A Process Step by Step: A Practical Guide for Junior Legal Counsel.” The session was organized for the Belgian Institute for Company Lawyers (IBJ / IJE) and offered a practice-oriented walkthrough of the main phases, documents, and negotiation dynamics that structure M&A deals. This article summarizes the key insights shared during that session.
Overview of the Deal Process
Any M&A transaction can be understood as a staged process with mirrored responsibilities on each side of the table. On the buy side, the process begins with defining an acquisition strategy, setting criteria around sector, size, geography, and price range, and identifying potential targets. On the sell side, this early phase involves the decision to sell, the appointment of M&A advisors, and the preparation of the data room.
In the second phase, the buy side screens targets and signs non-disclosure agreements (NDAs), while the sell side runs the sale process and distributes teasers and an information memorandum (IM) to prospective buyers. First-round bids follow, with potential buyers submitting indications of interest (IOIs), while the seller evaluates those IOIs and shortlists the most credible bidders.
The due diligence phase then kicks in: the potential buyer(s) conduct(s) comprehensive due diligence review of the target group and attend(s) management presentations, while the seller opens the virtual data room (VDR) and hosts those presentations. Once due diligence is sufficiently advanced, the potential buyer(s) submit(s) a binding offer and negotiates main deal terms, with the seller reviewing competing offers.
The parties then negotiate the share purchase agreement through to signing. Once the conditions precedent have been satisfied (e.g., antitrust clearance, foreign direct investment approval, etc.), closing of the transaction can occur. The post-closing phase involves, on the buy side, integration and realization of synergies, as well as the management of any final price adjustments and claims under the representations and warranties regime.
Negotiating Engagement Terms with Investment Banks
One important practical preliminary step in a sale process is negotiating the terms on which the investment bank or M&A advisor is retained. The webinar devoted particular attention to this topic.
Fees and Compensation
Investment bank compensation typically consists of a combination of a retainer and a success fee, the latter generally ranging from 1% to 5% of the deal value. The success fee component is payable only upon closing. A key practical recommendation is to tie success fees to actual proceeds received, rather than to the headline deal value.
On expenses, uncapped reimbursement is what bankers often seek, while clients typically push for a cap and/or pre-approval.
Scope, Duration, and Tail Protection
The engagement letter should clearly define the banker’s deliverables, including marketing activities, buyer outreach, and negotiations. Equally important is ensuring that defined terms match the actual transaction scope — for example, limiting “Transaction” to a sale of 100% of the shares and clearly defining what constitutes the “transaction value.”
On the question of duration, exclusivity provisions are typically framed differently depending on the perspective: bankers commonly seek 6 to 12 months of exclusivity, while clients prefer a shorter window of 3 to 6 months. The tail period — the period after termination during which the bank remains entitled to a fee if a deal closes with a buyer it introduced — should be carefully defined so that it covers only named parties and runs for a reasonable period.
Termination and Liability
M&A engagement letters typically provide that either party may terminate with written notice, that retainers are non-refundable and expenses are reimbursed through the date of termination, that the banker’s liability is often capped at total fees paid, and that the banker is required to disclose any conflicts of interest.
The Data Room: Practical and Legal Challenges
More Than a Digital Archive
The virtual data room is the central hub for all information shared during the due diligence process, including the Q&A process, up to the agreed cut-off date. Access is restricted to candidates who have signed an NDA. Virtual data room platforms have now fully replaced physical data rooms.
Document organization within the data room matters importantly. Good document hygiene requires clear and readable file names, the absence of duplicate versions, the uploading of executed versions only, and a consistent folder structure. Sellers must also avoid providing erroneous information or intentionally withholding relevant materials. The quality and completeness of the data room directly affects the deal price, the SPA negotiation, and the seller’s ultimate liability. A well-prepared and structured data room boosts the seller’s credibility and speeds up the transaction process.
Information Sharing: GDPR and Competition Law
Two important compliance dimensions govern what can be shared in the data room and when.
From a data protection perspective, the principle of data minimization must be applied from the outset: only information that is strictly necessary should be uploaded, individual employee files should be replaced with anonymized overviews, and contact names that add no diligence value should be redacted. Appropriate agreements — including an NDA and a data processing agreement with the VDR provider — must be in place before access is granted. Sensitive data such as individual remuneration, equity plans, and management evaluations should only be released at a later stage of the process.
From a competition law perspective, due diligence frequently involves commercially sensitive information — including pricing policy, costs, margins, marketing strategy, productivity, and customer and supplier data — that carries competition law-related risks, particularly when the buyer and seller are competitors. As a general rule, competitors should not exchange such information freely. Each situation should be assessed on a case-by-case basis with a competition lawyer, and sensitive information should ideally be shared later in the process and through intermediaries such as counsel or financial advisors. Clean-team arrangements are recommended: access to sensitive information is restricted to non-operational persons who have signed a dedicated clean team agreement.
Data Room Disclosure in Belgian SPAs
In Belgian M&A practice, data room disclosure is rather common in SPAs, but remains a heavily negotiated point, in particular by US buyers who will push for disclosure letters. Sellers typically seek broad disclosure, arguing that everything in the data room qualifies as disclosed. If Buyer accepts the principle, they will insist on a higher “fair disclosure” standard, require that information be specific and findable, and seek exceptions for fundamental warranties and tax notably.
Heavily Negotiated SPA Provisions
Price Mechanisms
The purchase price in an M&A transaction is typically structured in three main ways. Under a locked-box mechanism, the purchase price is fixed by reference to a historical balance sheet — the locked-box date — with no post-closing price adjustment. The key protective feature for the buyer is the concept of “leakage”, which distinguishes between permitted and prohibited value transfers, with a euro-for-euro indemnification mechanism. The locked-box is often seen as seller-friendly and is commonly used in competitive sale processes.
Alternatively, under a closing accounts mechanism, a provisional purchase price is paid at closing, followed by a post-closing adjustment based on a balance sheet drawn up on the closing date. Key issues include agreeing on financial metrics, determining who prepares the closing accounts and how, and establishing a dispute resolution mechanism. This approach is considered balanced and is common in bilateral or negotiated transactions.
Another price component — the earn-out — links part of the purchase price to the future performance of the target business, often serving as a bridge between a buyer’s and seller’s valuation gap. For earn-outs to work in practice, the formula must be sufficiently precise and objective, and the financial targets and earn-out duration must be clearly defined. Sellers should negotiate conduct-of-business protections for the earn-out period, information and audit rights. Earn-outs are particularly common in transactions involving emerging tech companies.
Limitation of Seller’s Liability
The SPA’s representations and warranties and specific indemnities are the primary mechanisms extending the seller’s liability after closing. Representations and warranties typically cover unidentified risks — with subcategories including fundamentals, tax, and general business warranties — while specific indemnities address identified risks that have emerged from the due diligence process. Limitations on seller’s liability are essential in any well-negotiated deal.
On the temporal dimension, the survival period for a claim depends on the type of underlying representation or warranty, with different durations typically applying to fundamental warranties , tax warranties, and general business warranties. Specific indemnities may be subject to longer time limits or, in some cases, no time limitation at all. Notification requirements — covering the form, content, and timing of any claim notice — are also a key negotiation point.
On the financial dimension, the main liability-limitation concepts include individual thresholds (de minimis), aggregate thresholds (baskets), which can take the form of a tipping basket or a deductible basket, an aggregate liability cap.
Finally, the parties will negotiate qualitative limitations. These include the scope of disclosed matters — whether through a disclosure letter, as typically requested by US buyers, or through data room disclosure subject to a fair disclosure standard — as well as anti-sandbagging provisions. Knowledge qualifiers tie liability to the awareness of specified key persons within a defined scope. Materiality qualifiers are used to filter out minor claims.
Standard exclusions from seller liability typically include matters for which provisions or reserves already exist in the target’s accounts, contingent liabilities, changes in law, regulation, or accounting standards, losses recoverable from third parties or under insurance policies, losses caused by actions of the buyer or target itself, and losses that the buyer failed to mitigate.
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