Exclusivity
All Terms
What is Exclusivity in M&A Transactions?
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.
Example
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.
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