1. Choose the Deal Structure before Pricing the Risk
The first question is what the buyer wants to acquire and what it is willing to inherit. Structure affects ownership, liabilities, approvals, consents, tax treatment, and remedies after closing.
Compare Stock, Asset, and Merger Structures
| Structure | Core Effect | Key Review |
|---|---|---|
| Stock Purchase | Target ownership changes. | Historic liabilities, control rights, tax treatment. |
| Asset Purchase | Selected assets and duties transfer. | Assignments, assumed debt, successor risk. |
| Merger | Entities combine by statute. | Approvals, succession, filings, governing law. |
Statutory Approval Requiremapply the Corporate Rules That Fit the Dealents under New York Law
Where the Business Corporation Law governs the relevant corporation, structure changes the approval path.
- BCL § 907 addresses mergers or consolidations involving domestic and foreign corporations.
- BCL § 909 governs certain transfers of all or substantially all assets outside the usual course.
- A stock sale differs because shareholders transfer shares rather than corporate assets.
2. Define the Deal Vehicle and Due Diligence Scope
The deal vehicle should fit ownership, funding, tax, governance, and exit plans. Diligence should focus on facts that can change price, timing, liability, or closing terms.
Separate Formation from Operating Authority
A foreign corporation doing business in the state generally must obtain authority under BCL § 1301, subject to listed exceptions.
- Check the law governing the deal vehicle.
- Map where the business will operate after closing.
- Check company authority, licenses, and registrations.
Spend Diligence Time on Deal-Changing Facts
A focused legal due diligence review should target records that may alter deal economics or risk.
- Financial statements, debt, taxes, and working capital.
- Material contracts, control-change terms, and licenses.
- Employment, intellectual property, disputes, and compliance.
- Industry rules affecting ownership or work.
3. Screen Cfius and Antitrust Risk before Signing
Agency work is easier to manage while the contract and closing calendar can still move. CFIUS and federal antitrust review answer different questions and should remain separate workstreams.
Determine Whether Cfius Reaches the Transaction
CFIUS can review deals that may result in foreign control of a U.S. .usiness and certain noncontrol stakes. A foreign investment and CFIUS review should examine:
- The investor's ownership, control, and deal rights.
- The target's technology, systems, and data.
- Whether a mandatory filing rule applies.
- Whether a declaration or notice fits the deal.
Run Hsr Analysis on Its Own Track
For deals closing on or after February 17, 2026, the minimum HSR size-of-transaction threshold is $133.9 million. Other tests, valuation rules, and exemptions may still control reportability.
- Use the threshold in effect when the deal will close.
- Review relevant exemptions and other HSR tests.
- Assess merger risk separately from filing status.
An antitrust and competition law review can address merger risk.
4. Match Financing and Risk Allocation to the Deal
Funding terms can affect closing certainty as much as price. The parties also need a plan for losses found after control changes.
Connect Funding to the Closing Calendar
An acquisition finance review can align debt, equity, and cash funding with the deal records.
- Check lender conditions, covenants, and funding steps.
- Check equity approvals and committed funds.
- Coordinate funding with agency timing.
Decide How Post-Closing Risk Will Be Shared
Warranties, indemnities, escrow, and insurance serve distinct roles. Their terms should reflect the deal form and diligence findings.
- Negotiate baskets, caps, and survival terms.
- Use specific indemnities for identified risks.
- Consider escrow or holdbacks for defined duties.
- Assess R&W insurance where suitable.
5. Make Regulatory Approval Part of the Closing Test
Signing does not mean the deal is ready to close. Agency review, funding, company approvals, and key consents may remain open.
Put Approval Risk into the Agreement
- Assign filing and cooperation duties.
- Define required efforts and mitigation duties.
- Address MAE terms and carve-outs.
- Set exit rights for unresolved closing terms.
Confirm Actual Status before Funds Move
- Verify required approvals and waiting status.
- Confirm company approvals and key consents.
- Check funding, payoff, and transfer records.
- Clear open conditions under the contract.
6. Plan Post-Closing Integration before Control Changes
Integration can create new business risk while the buyer also inherits agreed duties. The record should separate seller breaches from problems caused by later management decisions.
Keep Seller Obligations Visible
- Track claim notices and survival terms.
- Maintain escrow and claim records.
- Document transition duties.
- Monitor earn-outs and later payments.
Separate Integration Risk from Seller Breach
- Find the contract basis for each claim.
- Preserve records showing when the issue arose.
- Separate inherited liabilities from later decisions.
- Track personnel, systems, and transition issues apart.
7. Frequently Asked Questions
Can a foreign buyer acquire a company without forming a new U.S. subsidiary?
Possibly. The answer depends on the buyer, target, funding, tax plan, agency issues, and rights acquired. A separate vehicle may still support funding, governance, or risk allocation.
Does every foreign acquisition require a CFIUS filing?
No. Jurisdiction and mandatory filing rules depend on the investor, target, structure, and rights acquired. Some covered deals may be filed voluntarily, while specified deals can trigger a mandatory filing.
Can the parties sign before CFIUS review is complete?
Possibly. The contract should address filing duties, cooperation, mitigation, timing, and closing terms. The parties should first decide whether a mandatory filing rule applies.
Who bears a liability found after closing?
The answer depends on structure, governing law, assumed liabilities, warranties, indemnity terms, insurance, and the source of the loss.
8. Build the Acquisition Around the Risks That Control Closing
The foreign company acquisition process works best when structure, diligence, funding, agency review, and risk allocation follow one plan. Early choices can determine which approvals are needed and which duties remain after closing.
SJKP's attorneys assist foreign investors and deal teams with deal structures, agency screening, due diligence, funding, deal records, and closing terms. The firm's lawyers can organize the legal work around the approvals, risks, and later duties the deal creates.
03 Aug, 2026
