Document background
An Acquisition Letter of Intent (LOI) is commonly used in the initial stages of merger and acquisition transactions in India, serving as a bridge between preliminary discussions and the final definitive agreements. This document typically comes into play when parties have reached a general understanding on key commercial terms but need to formalize their intent before proceeding with detailed due diligence and final documentation. The LOI outlines crucial aspects such as transaction structure, approximate valuation, exclusivity period, and confidentiality obligations, while clearly distinguishing between binding and non-binding provisions. Under Indian law, particular attention must be paid to compliance with the Indian Contract Act, 1872, Companies Act, 2013, and relevant SEBI regulations for listed companies. The document is especially important in cross-border transactions where foreign investment regulations need to be considered.
