Negotiation and drafting of transaction documentation
After gaining information about the target, the parties begin negotiations toward a mutually satisfactory price and transaction structure (i.e. the terms under which ownership of the target will pass to the buyer).
A frequently encountered model is to sign an undertaking or a conditional agreement, which defines the conditions that must be fulfilled before signing of the final agreement transferring the target to the buyer or direct passage of the target to the buyer.
Conditions may include, for example, obtaining permission for a concentration, or for acquisition of real estate by a foreigner. Other conditions may arise under the business terms agreed between the parties, e.g. prior restructuring of employment or financing of the business.