Preparation of M&A Transactions – Support for Sellers and Buyers

Why is transaction preparation complex?

To achieve an optimal outcome in an M&A deal, several factors must be considered, including:

• selecting the appropriate transaction type (share deal, asset deal, business line transfer, corporate transformation/restructuring, or other solution),
• the ownership structure of the parties—e.g. on the seller side: holding structures, fiduciary asset management/trust structures, etc.; and on the buyer side: the group structure into which the target company will be integrated,
• tax impacts and the tax-efficient preparation of a future exit,
• early documentation of key terms (letters of intent and key commercial terms),
• reviewing permits and transaction limitations (FDI screening, Hungarian Competition Authority procedure, change of control provisions, SME status, sector-specific restrictions),
• defining the scope and timing of due diligence, seller remediation obligations related to findings, and tailoring warranties and the indemnity framework,
• drafting the Share Purchase Agreement (SPA) terms, including limitation of liability and security arrangements,
• specifying purchase price adjustment methods and principles.

What risks does the transaction preparation process involve?

Risks typically arise when a transaction is not properly prepared and—most often due to time constraints—either the seller or the buyer is forced to structure the deal under non-optimal terms. Examples include:

• a tax-inefficient structure or suboptimal financing or exit strategy,
• failure to clarify certain key terms upfront, which may lead to disputes mid-process and/or prolonged negotiations (including due to unfamiliarity with market practice),
• improperly handled confidentiality and data disclosure,
• missing or late-managed third-party consents (change of control),
• overlooking required authority/ministerial approvals (HCA/GVH, FDI) or designing the transaction timeline without taking these procedures into account,
• lack of due diligence, or poorly managed closing conditions and liability regime stemming from due diligence findings,
• inadequate purchase price calculation and adjustment mechanisms, poorly planned payment schedules, and retention/holdback arrangements.

RSM’s M&A Transaction Preparation Service focuses on the following areas

Our experts support clients from the very first discussions and throughout the entire preparation process—especially in the following areas:

1) Designing and setting up the appropriate structure

On the seller side:

• reviewing the expected tax implications of the sale,
• addressing the main issues of the seller’s post-transaction liability,
• taking ownership structure and specificities into account (setting up a holding structure or moving the target company within the group),
• advice related to the notification of shareholdings,
• assessing—based on long-term objectives—the relevance of fiduciary asset management (trust) or asset management foundation structures,
• where necessary, pre-transaction restructuring (aligning ownership ratios, shareholders’ agreements with co-owners, preparing tag-along/joint sale terms).

On the buyer side:

• positioning the target company/business line within the group structure,
• considerations related to financing, risk mitigation, future operation and exit,
• tax impacts of the acquisition (especially in an international group context),
• selecting the optimal transaction type; advantages/disadvantages of options (timing, financing, tax impact, liability).

2) Investor outreach and target identification

On the seller side: contacting investors, preparing and presenting an information memorandum, supporting initial negotiations; where relevant, preparing a tax factbook.
On the buyer side: identifying target companies, conducting an initial targeted review to identify potential red-flag risks to support management decision-making.

3) Support in initial negotiations, letters of intent (LOI / MoU / Term Sheet)

Based on our practical experience, we help identify which issues may seem “minor” at the beginning but can become critical later—and where it is worth recording detailed terms early on. We assist in documenting and clarifying the key terms of initial statements (governing law, dispute resolution, exclusivity, confidentiality, non-solicitation, binding effect).

4) Non-disclosure agreement (NDA)

Drafting confidentiality obligations and sanctions often goes beyond standard agreements—particularly when transferring personal data or where MAR (Market Abuse Regulation) considerations apply.

5) Review of permits and transaction limitations

• reviewing change of control provisions (e.g., financing bank agreements, state aid/grant schemes),
• potential relevance of SME status,
• required approvals (concentrations → Hungarian Competition Authority / GVH),
• FDI regulation for foreign buyers (ministerial acknowledgement/approval),
• sector-specific restrictions (financial sector, agriculture, healthcare, energy).

6) Due diligence (legal, tax, financial)

On the buyer side: conducting due diligence, identifying risks, and making recommendations for remediation.
On the seller side: preparation, compiling the data room, supporting Q&A; also advising on when and what confidential data should be disclosed.
On both sides: handling closing conditions and supporting the design of the liability/indemnity framework.

7) Preparing and negotiating the Share Purchase Agreement (SPA)

Key areas requiring M&A experience include purchase price calculation and adjustment mechanisms, payment terms, warranties, securities, and liability provisions. SPA preparation is critical not only from a legal but also from a financial and tax perspective.

Why involve an expert as early as possible?

In the due diligence and contract preparation phase, advisors often have to work with the existing and agreed structure and terms, making it harder to adjust conditions to best serve the client’s interests. Therefore, we recommend discussing critical questions as soon as a transaction intention arises—especially when a foreign party is involved.

Why choose RSM Hungary’s M&A team?

With broad industry and project experience, our team has successfully closed numerous M&A transactions. Our professionals bring essential company valuation, tax, and legal expertise, as well as proven negotiation techniques. As a member of the global RSM network, we support the successful closing of the transaction with our relationships and knowledge of domestic and international investors.

Contact our M&A experts!