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Acquisition Agreement
I need an acquisition agreement for the purchase of a mid-sized technology company, including detailed terms on the transfer of intellectual property, employee retention plans, and a structured payment schedule with an initial deposit and subsequent installments based on performance milestones.
What is an Acquisition Agreement?
An Acquisition Agreement spells out the terms and conditions when one company buys another company or its assets in the Netherlands. This legally binding contract covers crucial details like the purchase price, payment terms, and what exactly is being bought - from physical assets to intellectual property rights.
Under Dutch corporate law, these agreements protect both buyers and sellers by clearly stating each party's obligations, warranties, and representations. They typically include important provisions about employee contracts, regulatory approvals, and how to handle any discoveries made during due diligence. The agreement becomes especially important for cross-border deals, where Dutch merger control rules and EU regulations often come into play.
When should you use an Acquisition Agreement?
You need an Acquisition Agreement when buying or selling a business in the Netherlands, especially during complex transactions involving multiple assets or stakeholders. The timing is crucial - this agreement needs to be in place before any money changes hands or assets transfer ownership.
Dutch companies use these agreements during mergers, business unit purchases, or when acquiring specific assets like intellectual property or real estate. The agreement becomes particularly important when dealing with listed companies, cross-border transactions, or situations involving Works Council approval. Having it ready early helps prevent disputes, ensures regulatory compliance, and protects both parties throughout the acquisition process.
What are the different types of Acquisition Agreement?
- Acquisition Term Sheet: Initial outline of key deal terms, non-binding except for confidentiality provisions
- Real Estate Purchase Letter Of Intent: Preliminary agreement specifically for property acquisitions, addressing unique real estate concerns
- Acquisition Purchase Agreement: Comprehensive contract for straightforward asset or share purchases
- Merger And Acquisition Agreement: Complex agreement combining two entities through merger or consolidation
- Company Acquisition Contract: Focused on complete company takeovers, including operational integration details
Who should typically use an Acquisition Agreement?
- Acquiring Companies: Dutch businesses or international corporations looking to purchase assets, shares, or entire companies in the Netherlands
- Selling Parties: Business owners, shareholders, or parent companies divesting their interests or assets
- Corporate Lawyers: Draft and review Acquisition Agreements, ensuring compliance with Dutch corporate law and EU regulations
- Financial Advisors: Help structure deals and verify financial terms align with market conditions
- Works Councils: Must be consulted when Dutch employee interests are affected by the acquisition
- Regulatory Bodies: Including AFM and DNB for regulated sectors, reviewing and approving major transactions
How do you write an Acquisition Agreement?
- Due Diligence: Gather detailed financial records, assets lists, contracts, and intellectual property documentation
- Party Details: Collect accurate legal names, registration numbers, and authorized representatives of all involved entities
- Purchase Terms: Define precise purchase price, payment structure, and any earn-out arrangements
- Asset Scope: List all assets, liabilities, and contracts being transferred
- Employee Matters: Document current employment agreements and Works Council requirements
- Regulatory Checks: Identify needed approvals from Dutch authorities
- Timeline Planning: Set clear closing dates and conditions precedent
What should be included in an Acquisition Agreement?
- Party Identification: Full legal names, registration numbers, and addresses of buyer and seller
- Transaction Structure: Clear description of shares or assets being transferred
- Purchase Price: Detailed payment terms, including adjustments and earn-out provisions
- Warranties: Comprehensive statements about company condition, assets, and liabilities
- Employee Provisions: Transfer of employment contracts and Works Council considerations
- Governing Law: Explicit choice of Dutch law and jurisdiction
- Conditions Precedent: Required regulatory approvals and closing requirements
- Signing Authority: Proper execution blocks with authorized representatives
What's the difference between an Acquisition Agreement and a Business Purchase Agreement?
An Acquisition Agreement differs significantly from a Business Purchase Agreement in several key aspects, though both deal with company transactions. While they may seem similar at first glance, understanding their distinct features helps choose the right document for your situation.
- Scope and Complexity: Acquisition Agreements typically cover broader transactions, including share transfers, multiple assets, and complex corporate restructuring. Business Purchase Agreements focus more narrowly on transferring specific business operations or assets.
- Legal Requirements: Under Dutch law, Acquisition Agreements must address Works Council consultation and often require regulatory approvals. Business Purchase Agreements generally have fewer regulatory hurdles.
- Due Diligence Depth: Acquisition Agreements include more extensive warranties and representations, reflecting deeper due diligence requirements. Business Purchase Agreements typically involve simpler verification processes.
- Post-Closing Obligations: Acquisition Agreements often include detailed post-merger integration plans and continuing obligations. Business Purchase Agreements usually have more straightforward handover terms.
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