Document background
The Acquisition Term Sheet is a crucial preliminary document used in the early stages of M&A transactions under German law. It serves as a roadmap for the transaction, documenting the parties' initial understanding of key commercial and legal terms before proceeding with detailed due diligence and definitive agreements. Typically used after initial discussions but before comprehensive due diligence, this document reflects German legal requirements and market practices, including consideration of German corporate law, merger control regulations, and foreign investment restrictions where applicable. While most provisions are non-binding, certain sections like confidentiality and exclusivity are typically made binding. The term sheet helps align parties' expectations early in the process and provides a structured framework for negotiating the detailed transaction documents that will follow.
