M&A Engagement Letters: Strategies for Buyers, Sellers, Investment Banks, and Their Counsel

The negotiation of the M&A engagement letter between a buyer or seller and its investment bank/financial adviser is critical to the transaction process. The engagement letter sets the stage for the transaction and the tone for the parties' relationship throughout the deal and beyond.

Careful preparation of the engagement letter helps ensure that the buyer or seller and the investment bank have a common understanding of the parameters--business and legal--governing their relationship. Whether for a private or public company transaction, the letter should include the scope of the services, whether and when fees are to be paid, key assumptions, qualifications and limitations on the advice to be provided, and the parties' obligations concerning confidentiality, indemnification, and other matters.

Listen as our authoritative panel of M&A attorneys examines and discusses the critical sections of an engagement letter and negotiation points for buyers, sellers, and investment banks.

I. Critical provisions in an engagement letter

A. Scope of services

B. Compensation of adviser

C. Assumptions, qualifications, and limitations on advice

D. Confidentiality

E. Indemnification

F. Other key provisions

II. Trends and recent case law impacting M&A engagement letter negotiations

The panel will review these and other high priority issues:

• What current legal trends and recent case law impact the negotiation of the M&A engagement letter between buyers or sellers and their investment bank?
• Which provisions should counsel scrutinize and strategically negotiate in an M&A engagement letter?
• How are risks typically allocated in an M&A engagement letter?