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Exclusivity in Mergers and Acquisitions (M&A) transactions refers to an agreement where the seller grants the buyer an exclusive right to negotiate the deal for a specified period. During this exclusivity period, the seller agrees not to entertain offers or engage in negotiations with other potential buyers. This arrangement ensures that the buyer can conduct due diligence and finalize the terms of the transaction without the risk of competing bids.
Suppose Company A is interested in acquiring Company B. Company B agrees to an exclusivity period of 60 days with Company A. During these 60 days, Company B cannot negotiate or solicit offers from any other potential buyers. This period allows Company A to perform thorough due diligence, arrange financing, and negotiate final terms without the pressure of competing bids. If the deal is not finalized within this period, Company B can then consider other offers.
Alehar is an international boutique investment bank which works with startups, medium-sized businesses and investors. Our advisory services include Fundraising, M&A and Corporate Finance / Fractional CFO.
We’re passionate about supporting business leaders and their companies with corporate finance and we’d love to help you. To talk to us and find out what Alehar can do for you, please use the section below to contact us, or email us at hello@alehar.com.
AleharX is an independent resource platform we’re building to equip companies and investors with the crucial knowledge, resources, and insights needed to navigate the complex landscape of Fundraising, M&A and Corporate Finance.
