Document background
The Business Acquisition Term Sheet is a crucial document in South African M&A practice, typically used in the initial stages of a business acquisition to document the parties' preliminary understanding of key transaction terms. It serves as a roadmap for the transaction and subsequent detailed agreements, covering essential elements such as purchase price, payment structure, conditions precedent, and timing. While predominantly non-binding, certain provisions like confidentiality and exclusivity are usually binding. The document must consider South African specific requirements including Companies Act compliance, Competition Commission thresholds, B-BBEE implications, and exchange control regulations for foreign investors. It forms the basis for due diligence investigations and the drafting of definitive agreements.
