Is there any maximum time period for negotiations or due diligence?

Mergers & Acquisitions (3rd edition)

Belgium Small Flag Belgium

There are no general rules as to the timeframe for negotiations or due diligence. The bid process itself is, however, subject to a certain timeframe.

Bermuda Small Flag Bermuda

There is no statutorily prescribed time period for negotiations or due diligence. However, in committing to any such period, particularly with respect to any corresponding exclusivity that is to apply as between the parties, the directors of any Bermuda company must be comfortable that doing so is in the best interests of the company. This is to ensure that there has been an appropriate exercise of their fiduciary duties, particularly to act in the best interests of the company and avoid fettering their discretion to do so.

Colombia Small Flag Colombia

There is no maximum time period for negotiations or due diligence, although it is customary that the period to finalize the due diligence is between 30 and 60 days and the negotiation phase takes around 30 to 45 days.

Croatia Small Flag Croatia

There is no maximum time period for negotiations or due diligence. Typically, the due diligence phase is between six and twelve weeks, which significantly depends on the deal size and complexity of the deal. The negotiation phase is typically two to four weeks.

Ecuador Small Flag Ecuador

There is no standard. It is always subject to the agreement of the parties. However, it is usually expected that a DD does not take more than 60 days.

Austria Small Flag Austria

No, there is no maximum time period for negotiations or due diligence by law. However, depending on the size of the target company, the structure of the transaction or the seller’s strategic motives, the seller might set such time limit individually. Typically, in a structured bidding process, the due diligence phase leading to a binding offer of interested bidders will be set at 4 to 8 weeks. Bidders reaching the next stage of the sales process will typically have further opportunities to continue their due diligence during the negotiation phase until shortly before signing.

Czech Republic Small Flag Czech Republic

With regard to the public M&A transactions, the public takeover procedure is subject to regulation under the Act on Takeover Bids which does not determine any maximum time period for a phase of negotiations or due diligence. However, the bidder is obliged to publicly disclose an end of validity of public offer 14 days prior to the date thereof.

In the private M&A transactions, there is no maximum time period for negotiations or due diligence as the time requirements depend on the deal size, structure and complexity. The due diligence phase lasts typically between 4 and 12 weeks and the negotiation phase between 4 and 6 weeks but can significantly vary case by case.

British Virgin Islands Small Flag British Virgin Islands

There is no BVI law requirement in respect of a maximum period for negotiations or due diligence.

Cayman Islands Small Flag Cayman Islands

As a matter of Cayman Islands law, there are no minimum or maximum time periods allowed for conducting negotiations or due diligence. The parties would be free to contract as they wish in this regard. In the case of a listed takeover, the particular rules of the relevant exchange would apply.

France Small Flag France

There are no time period limits for negotiations or due diligence.

Greece Small Flag Greece

No maximum time period for negotiations or due diligence between interested parties is provided in relation to private companies. Parties should however refrain from unjustifiably prolonging negotiations, pursuant to the general good faith obligation imposed by the Greek Civil Code. A time limit can be agreed inter partes, after the expiration of which negotiations are either deemed as failed or can be renewed. In case of listed companies, the acceptance of bid must take place within 4 to 8 weeks from the date that the offer document was published.

Japan Small Flag Japan

There are no limitations (maximum or minimum) under the laws of Japan on the amount of time the parties can take for negotiations and due diligence. Practically speaking, when one party has more bargaining power in a transaction (e.g., the seller in an auction), that party will sometimes unilaterally set the schedule for negotiation and due diligence for the transaction.

Jersey Small Flag Jersey

No. However, if the Takeover Code applies there are time periods relating to the making of the offer which must be adhered to.

Mauritius Small Flag Mauritius

There are no prescribed rules on this subject-matter.

Myanmar Small Flag Myanmar

No.

Norway Small Flag Norway

No.

Peru Small Flag Peru

Peruvian regulations do not contain specific rules regarding the period for the negotiations or to the conduct a proper due diligence. Usually, legal counsels determine this period by using their experience in similar past transactions. In addition to this, the legal counsels can suggest their clients a period in which, if there is no response from the potential buyer or seller to the offer, they can retire themselves from the transaction without any penalties at all. On the other hand, they can also suggest their clients to stablish penalties to the other party if they retire from the transaction when it is in the final stage or the client has spent considerable resources without any favorable response from the other party. These agreements are usually carried out and established in private documents and on a case-by-case basis.

Philippines Small Flag Philippines

At present, Philippine laws do not impose any maximum time period for negotiations or due diligence.

Isle of Man Small Flag Isle of Man

There is no maximum time periods for negotiations or due diligence.

Portugal Small Flag Portugal

There is no maximum time period for negotiations or due diligence in private M&A deals.

The same occurs in public M&A deals although certain legal terms do apply to PTOs. For instance, the actual offering shall last between 2 and 10 weeks.

Romania Small Flag Romania

No. In practice, the due diligence exercise and the negotiations are completed within 2-3 months.

Russia Small Flag Russia

There is no pre-set maximum period for negotiations and/or due diligence. Usually, the process of entering into and completing an M&A transaction takes from two months to half a year or even longer in the case of complex deals including detailed due diligence.

South Africa Small Flag South Africa

There are no legislated time limits for negotiations or due diligence prior to the publication of a firm intention announcement. Subsequent to the publication of a firm intention announcement there is a strictly regulated timetable which may be relaxed by agreement in the case of friendly takeovers.

Sweden Small Flag Sweden

No.

Switzerland Small Flag Switzerland

There is no maximum time period for negotiations or due diligence. Only once a bidder has formally launched an offer, a set timetable applies until completion of the transaction.

Thailand Small Flag Thailand

There is no maximum time period for negotiations or due diligence to take place.

UAE Small Flag UAE

There are no prescribed time periods for negotiations or due diligence.

India Small Flag India

No, there is no maximum period for negotiations or due diligence. However, most transactions provide for an outer limit for negotiations and for due diligence.

Vietnam Small Flag Vietnam

Vietnam law does not specify any maximum time period for negotiations or due diligence in connection with Vietnam M&A transactions. Such matters are purely for commercial negotiation between the parties.

United States Small Flag United States

There are certain jurisdictions that place restrictions on the timing and depth of due diligence in mergers. No such restrictions are found in U.S. law. In the U.S., the due diligence process is driven largely by the requests of the buyer and the target’s willingness to cooperate. The process can continue for as long or as short as the parties agree. Before engaging a potential target, the buyer can conduct preliminary due diligence of the target’s publicly available information.

China Small Flag China

There is generally no time limit. However, if a public company is engaged in a transaction that it wishes to use to suspend trading of its shares, the public company may not suspend trading for more than three months without consent from the applicable stock exchange.

Egypt Small Flag Egypt

There is no maximum period for negotiations or due diligence.

However, upon disclosing its intention to submit a tender offer on a Publicly Traded Company, the potential acquirer must submit its offer within 60 business days; such period may be extended by an additional 60 business days upon approval by FRA.

In case the potential acquirer fails to submit a tender offer within the above mentioned periods or discloses its intention not to proceed with the tender offer, such potential acquirer shall be prohibited from submitting any other tender offer for a period of six months and from acquiring such number of shares in the Publicly Traded Company that may trigger an MTO requirement, unless the FRA approves otherwise.

Guernsey Small Flag Guernsey

There is no maximum time period for negotiations or due diligence to be conducted. However, where subject to the Takeover Code, the following timetable applies:

  1. Announcement Day. Date of announcement of intention to make the offer. This must be no later than 28 days from the announcement in which the bidder is first identified.
  2. Day 0. The bidder must post the offer document to the target's shareholders no later than 28 days from the Announcement Day.
  3. Day 14. This is the latest date the target can post a circular advising its shareholders of its views on a hostile takeover offer (in a recommended offer, this is included in the offer document).
  4. Day 21. The offer can be accepted from this date (although the offer can be extended by the bidder beyond this date).
  5. Day 42 (assuming first closing date is Day 21). The shareholders who have accepted the offer can withdraw their acceptances if the offer has not yet become or been declared unconditional as to acceptances.
  6. Day 46. This is the last date for the bidder to post any revised offer document improving its offer or to publish information which may increase the value of its bid where it is offering securities.
  7. Day 60. This is the last date for acceptances or purchases to be declared unconditional as to acceptances. If the offer has not been declared unconditional as to acceptances by midnight, the offer is deemed to have lapsed.
  8. Day 74 (assuming offer became unconditional as to acceptances on Day 60). This is the earliest date on which the offer can close.
  9. Day 81 (assuming offer became unconditional as to acceptances on Day 60). This is the last date by which all other conditions to the offer must be fulfilled or satisfied.
    The bidder must send the compulsory acquisition notices to minority shareholders to activate the squeeze-out procedure within a period of two months from the closing of the offer.

The bidder must send the compulsory acquisition notices to minority shareholders to activate the squeeze-out procedure within a period of two months from the closing of the offer.

Hong Kong Small Flag Hong Kong

In general, acquisitions of larger and more international target companies with more businesses and / or assets will likely involve longer negotiations and / or due diligence.

Please refer to the relevant Offshore Chapter for more detail.

United Kingdom Small Flag United Kingdom

In private M&A transactions, there are no time limits for negotiation or due diligence unless imposed by the parties themselves. In an auction situation the target company’s directors and shareholders may seek to impose certain timetable requirements as part of the auction process but these will be deal dependent.

For public M&A transactions, while there are not specific time periods specified for negotiations or due diligence per se, the Code does impose a strict timetable on the actual takeover process. The offer document must be sent within 28 days of the date of the announcement of a firm intention to make an offer but not earlier than 14 days after that announcement unless the target board consents otherwise. An offer must remain open for at least 21 days after the date the offer document is published. Assuming no competing offer is made, the last day an offer can become unconditional as to acceptances is the 60th day after the publication of the offer document and the remaining conditions to the offer must be satisfied by the 81st day after publication. Consideration must be posted to target shareholders by the 95th day after the publication of the offer document. An offer using the scheme of arrangement process will have a different timetable driven by the High Court process.

Cyprus Small Flag Cyprus

No maximum time period exists for negotiations or due diligence.

Hungary Small Flag Hungary

In case of the acquisition of private companies, the timeframe for negotiations and for due diligence is not regulated by the law. The timeframe is usually agreed upon by the parties, taking into account practical considerations which have an effect on the timing of the transaction, such as potential deadlines for the target company or for any of the parties, potential changes in the business or in the law, etc.

In case of the acquisition of a public company limited by shares (Nyrt.) by way of a public takeover bid, the Capital Market Act sets a certain timeframe for the public takeover process. Accordingly, the deadline for accepting the public takeover bid must be at least 30 days but may not be more than 65 days including extensions if any. This deadline is counted from the publication of the supervisory authority’s decision on the approval of the public takeover bid. The result of the public takeover bid shall be established and published within two days following the end of the aforementioned deadline.

Qatar Small Flag Qatar

No.

Slovenia Small Flag Slovenia

There is no maximum time period for negotiations or due diligence. When a bidder formally launches an offer, a timetable stipulated in Takeovers Act (ZPre-1) has to be respected until completion of the transaction. The time allowed for acceptance of a takeover bid may not be less than 28 days nor more than 60 days from the date of publication of the bid; nonetheless the time for acceptance of a takeover bid can be extended in certain circumstances (for example in case a competitive bid has been made).

Updated: May 14, 2019