Document background
A Letter Of Intent Share Purchase is a crucial preliminary document used in German M&A transactions to establish the framework for a potential share acquisition. It serves as a roadmap for the transaction, outlining key commercial terms while maintaining flexibility for detailed negotiations. Under German law, particular attention must be paid to clearly distinguishing between binding and non-binding provisions, as certain elements (such as confidentiality clauses) are typically intended to be legally binding while others remain subject to negotiation and due diligence. The document typically precedes the main share purchase agreement and is essential for securing exclusivity, setting transaction timelines, and establishing the scope of due diligence investigations. It needs to comply with German corporate law requirements, particularly the German Civil Code (BGB) and, depending on the company type, the Stock Corporation Act (AktG) or Limited Liability Companies Act (GmbHG).
