An acquisition process begins by defining the commercial objective, target business, proposed timetable and available funding. The buyer then assesses whether the transaction will be structured as a share purchase or an asset purchase. A share purchase transfers ownership of the company and its existing liabilities, while an asset purchase transfers specified assets, contracts and liabilities identified in the transaction documents.
The parties commonly sign a confidentiality agreement before exchanging sensitive information. Heads of terms then record the principal commercial points, such as price, consideration structure, exclusivity, conditions and the proposed completion date. These terms are usually subject to contract, but they provide a framework for negotiating the definitive documents. Harper James advises UK businesses on corporate and M&A matters under the laws of England and Wales.
Due diligence tests the information supplied by the seller. Legal enquiries generally cover corporate records, ownership of shares and assets, material contracts, intellectual property, employment arrangements, property, disputes, regulatory matters and data protection. Financial and commercial reviews examine matters such as revenue, liabilities, customer concentration and business performance. The findings inform the price, transaction structure and risk allocation.
The main document in a share purchase is the share purchase agreement. It sets out the shares being sold, consideration, completion mechanics, warranties, indemnities, limitations of liability and any conditions to completion. The seller’s disclosure letter identifies facts that qualify the warranties. In an asset purchase, the agreement specifies the assets, contracts, employees and liabilities transferring to the buyer, together with any required third-party consents.
Before signing or completion, the parties arrange acquisition finance, board approvals, shareholder approvals and regulatory or contractual consents where required. Employment issues require particular attention. The Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly known as TUPE, can apply when a business or undertaking transfers, creating information and consultation obligations and transferring certain employees.
Signing creates contractual obligations, while completion is the point at which the agreed transfer takes effect. The parties then implement post-completion actions, such as updating Companies House records, transferring operational control, notifying customers and suppliers, integrating systems and reviewing employment and commercial arrangements. A completion checklist assigns responsibility for each action and records any matters deferred after completion.
A well-managed process keeps the commercial objective, evidence from due diligence and legal terms aligned. Clear decision-making on price, risk, timing and integration reduces avoidable delay, while the acquisition documents provide the agreed framework for completing the transaction and managing identified risks.