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The Acquisition Term Sheet is a crucial preliminary document used in South African merger and acquisition transactions to establish the framework for negotiations and subsequent detailed agreements. It is typically prepared after initial discussions between parties but before comprehensive due diligence and detailed contract drafting. The document outlines key commercial terms including transaction structure, purchase price, conditions precedent, and timeline, while also addressing South Africa-specific considerations such as B-BBEE requirements and competition law implications. While predominantly non-binding, certain provisions such as confidentiality and exclusivity are typically binding. The term sheet serves as a roadmap for lawyers drafting detailed transaction documents and helps identify potential deal-breakers early in the process.

1. Parties: Details of the buyer, seller, and target company including full legal names and registration numbers

2. Background: Brief context of the proposed transaction and purpose of the term sheet

3. Definitions: Key terms used throughout the term sheet

4. Transaction Structure: Outline of the proposed deal structure, whether share purchase, asset purchase, or other mechanism

5. Purchase Price: Proposed consideration and payment terms, including any adjustments or earn-out mechanisms

6. Key Terms: Essential commercial terms including timing, conditions precedent, and key obligations

7. Due Diligence: Scope and process for due diligence investigation

8. Confidentiality: Binding provisions regarding confidentiality of negotiations and information

9. Exclusivity: Binding provisions regarding exclusive negotiation period if applicable

10. Costs: Allocation of transaction costs between parties

11. Timeline: Proposed timeline for key transaction milestones

12. Non-Binding Nature: Clear statement of which provisions are binding and non-binding

13. Governing Law: Specification of South African law as governing law