Document background
The Acquisition Letter of Intent is a crucial preliminary document in Canadian M&A transactions, typically used when a potential buyer wishes to formally express their serious intention to acquire a business while setting out the fundamental terms of the proposed deal. This document, while generally non-binding except for specific provisions (such as confidentiality and exclusivity), serves multiple important purposes: it demonstrates commitment, outlines key commercial terms, establishes a framework for due diligence, and provides a basis for obtaining preliminary regulatory approvals or financing commitments. The LOI must comply with Canadian federal and provincial laws, including competition laws, securities regulations, and corporate laws. It's particularly important in complex transactions where parties need to agree on basic terms before investing significant resources in detailed due diligence and definitive agreement preparation.
