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Nuts and bolts
Key points
- A mergers and acquisition document will extend beyond the transaction concerned.
- The importance of contractual drafting was highlighted in the Minera Las Bambas case.
- The contracts were governed by English law.
- An indemnity against the full amount of adversely determined tax matters.
- The sellers argued that tax became payable only when an enforceable obligation arose.
- Generic drafting will not cater for all scenarios.
- The Minera case demonstrates the importance of due diligence on transactions
- Tax advisers should work closely with lawyers to take account of the relevant tax regime.
The negotiation of mergers and acquisitions (M&A) transaction documents can often include detailed discussions on the technical drafting of particular provisions. Although the nuts and bolts of the underlying concerns may be technical in practice those drafting discussions are often extremely important and the precise words used (or not used) can be critical.
In the heat of negotiations it can be forgotten that the document has a life beyond...
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