Why closing can lag signing
Larger deals may need merger control clearance in the United States and in other countries where the parties do business, and each authority works on its own timetable. A foreign buyer of a U.S. business may face CFIUS review, and a U.S. buyer may face investment screening abroad. Sector regulators in areas like banking, telecommunications, or energy can add approvals of their own. Third-party consents under key contracts, such as leases, licenses, and customer agreements, may be needed when control changes. Each of these becomes a closing condition, and the purchase agreement has to say what happens if one is delayed or refused.
Allocating the risk
The parties negotiate how hard the buyer must work to obtain approvals, including whether it must accept conditions a regulator imposes. A reverse termination fee, paid by the buyer if the deal fails for regulatory reasons, is one tool for sharing that risk. Material adverse change clauses, outside dates, and covenants on how the target operates before closing also need attention, and their meaning can vary under different governing laws. Currency movement between signing and closing can change the economics, and some parties hedge it. Where the buyer's financing comes from abroad, the seller will want comfort that funds will actually arrive.
How we engage on a deal
We usually start by reviewing the deal's structure, the parties' revenues in each relevant country, and the target's business, so we can map the filings likely to apply. We coordinate local counsel and keep a single list of approvals, consents, and deadlines. During negotiation we focus on the clauses that decide who bears regulatory and timing risk, since those tend to matter most if something goes wrong. Bring the letter of intent, any draft agreement, and an organizational chart of both groups to the first meeting. If the deal is already signed, we focus on the path to closing and on keeping each filing consistent with the others.
