Our London office (Holborn Gate, 330 High Holborn, London, WC1V 7QH) regularly advises on share acquisitions, mergers, restructurings and related corporate transactions under the laws of England & Wales. Successful transactions rest on focused due diligence, clear allocation of risk and well‑drafted transaction documents—each tailored to the commercial and regulatory profile of the deal.

Key considerations in due diligence

Due diligence should be tailored to the target and the buyer’s commercial objectives. Typical areas of review include:

• Corporate: constitutional documents, minutes, shareholders’ agreements, ownership and capital structure, and share register;
• Financial and tax: audited accounts, tax filings, historic tax exposures, transfer pricing, and potential contingent liabilities;
• Contracts and commercial: material customer and supplier contracts, change‑of‑control clauses and termination triggers;
• Employment and pensions: key employment contracts, restrictive covenants, collective redundancies, and pension scheme deficits and recovery plans;
• Property and real estate: title, leases, planning constraints and environmental liabilities;
• Intellectual property and data protection: ownership and licences, data processing arrangements and GDPR compliance;
• Regulatory, competition and sanctions: licences, filings, merger control risks, and sanctions/AML exposure;
• Litigation and contingent liabilities: ongoing disputes, warranties given by third parties and insurance arrangements.

Structuring the share acquisition and transaction documents

Choice of structure (share sale, asset sale, or hybrid) largely determines the allocation of liabilities and tax consequences. Key documents and points of negotiation include:

• Sale and purchase agreement (SPA): scope of warranties, disclosure regime and indemnities;
• Disclosure letter/schedule: the practical mechanism for managing known exceptions to warranties;
• Completion mechanics: escrow, deferred consideration, completion accounts and purchase price adjustments;
• Conditionality and regulatory clearances: merger control, sector licences, Takeover Panel/FCA notifications for public companies;
• Ancillary documents: novation/assignment of contracts, employee transfer arrangements (TUPE where relevant), and transitional services agreements.

Practical checklist

1. Scope diligence early: prioritise deal‑critical areas (tax, pensions, regulatory) in a short form due diligence first pass.
2. Agree key commercial points in heads of terms to align expectations on price, conditionality and exclusivity.
3. Build a realistic timetable for regulatory clearances and third‑party consents affecting completion.
4. Negotiate disclosure mechanics and limits on liability (caps, baskets, time limits) as primary risk allocation tools.
5. Plan for post‑completion integration, data migration and employee consultation to minimise operational disruption.

Risk allocation and remedies

Buyers and sellers typically trade off immediate price against future liability exposure. Common tools to manage risk include escrow arrangements, specific indemnities for known exposures (tax, environmental, pension), warranty & indemnity insurance where marketable, and carefully drafted limitation provisions. The relative bargaining positions of parties and the nature of the target’s business will drive which tools are most appropriate.

Jurisdiction and sources

Relevant official sources and regulators include:

• Companies House
• HM Revenue & Customs (HMRC)
• HM Land Registry
• Competition and Markets Authority (CMA)
• Financial Conduct Authority (FCA) and The Takeover Panel (where public company rules apply)
• The Pensions Regulator
• Information Commissioner’s Office (ICO)
• Office of Financial Sanctions Implementation (OFSI)

General information only; not legal advice and not a substitute for advice on a particular matter.