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

Mergers & Acquisitions (2nd edition)

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.

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.

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 depend on the specific dynamics of the transaction in question.

For public M&A transactions, whilst 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 21 days after the date the offer document is published and there are dates on which the level of acceptances must be announced. There are key dates relating to the release of new material information and revisions to the offer which are relevant for hostile offers. The last day an offer can become unconditional as to acceptances or lapse 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.

The Code also contains provisions pursuant to which the Panel can compel a bidder to make an announcement of a firm intention to make an offer or announce that it is not going to make an offer, in which case it will be subject to the restrictions discussed in question 16 above.

Bulgaria Small Flag Bulgaria

There is no maximum period for negotiations or due diligence regulated by virtue of law. However, it is commonly accepted that (depending on the transaction) standard deals should be able to be completed in a reasonable timeframe of two to three months (excluding administrative approvals, as the case might be).

Colombia Small Flag Colombia

There is no minimum or maximum period for negotiations or due diligence under Colombia law. However, it is customary that a due diligence process takes from 45 to 60 calendar days and that negotiations aiming to finalize transaction documents range from 30 to 90 days, but it will depend on the specific features of the transaction.

France Small Flag France

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

New Zealand Small Flag New Zealand

There is no maximum time period for negotiations or due diligence to take place. However, in the case of a listed target company, the board will be conscious of its disclosure obligations and will be more likely to make public disclosure as the period of negotiations or due diligence proceeds (given the heightened risk of the market becoming aware of the pending transaction).

Egypt Small Flag Egypt

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

Capital Market Law set outs specific time-frames regarding submission of tender offers, where the acquirer must submit the tender offer within a period not exceeding 60 days from the day of disclosing its/his interest (duration could be extended based on material reasons as per the FRA’s discretion).

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.

Italy Small Flag Italy

No maximum time period exists for negotiations or due diligence.

Ireland Small Flag Ireland

There is no maximum time period for negotiations or due diligence, however, a target can object if it deems the period too long and the Panel can accept representations from both parties and impose a deadline.

Brazil Small Flag Brazil

No.

Cyprus Small Flag Cyprus

No maximum time period exists for negotiations or due diligence.

Norway Small Flag Norway

No.

Myanmar Small Flag Myanmar

No.

Greece Small Flag Greece

No maximum time period for negotiations or due diligence between interested parties is provided for 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.

Germany Small Flag Germany

The public takeover procedure is subject to a strict timetable that needs to be complied with by the bidder and the target. In general, a public offer process under the German Takeover Act takes a minimum of nine weeks and a maximum of 24 weeks from the announcement of the acquisition of control (mandatory offer) or the decision to launch a voluntary tender offer to completion of the offer procedure. Once the bidder has acquired control of the target or published its decision to launch a voluntary tender offer, the bidder is required to submit the offer document to BaFin for approval within four weeks. The four-week period may be extended by BaFin up to a total of eight weeks under certain circumstances (e.g., in cross-border transactions).

In private transactions, there is no maximum period for negotiations or due diligence. Typically, the due diligence phase is between six and 12 weeks (depending on the deal size and complexity) and the negotiation phase is typically two to four weeks.

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.

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.

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.

Russia Small Flag Russia

No, 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.

Romania Small Flag Romania

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

Qatar Small Flag Qatar

No.

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.

Sweden Small Flag Sweden

No.

Philippines Small Flag Philippines

None.

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.

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.

Isle of Man Small Flag Isle of Man

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

Mauritius Small Flag Mauritius

There are no prescribed rules on this subject-matter.

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.

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.

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.

Turkey Small Flag Turkey

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

Typically, it is expected that a share acquisition deal together with the due diligence and negotiation phases would take from three to eight months.

Nigeria Small Flag Nigeria

There is no maximum period for negotiations and due diligence. Time for negotiation and due diligence is dependent upon the structure of the deal and agreed contractual timelines.

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.

Updated: November 13, 2018