1. Initial Deal Assessment and Pre-Loi Review
Early legal review begins with the proposed transaction form, the parties involved, and the jurisdictions connected to the target and its assets. A cross-border M&A attorney can use that information to identify foreign investment screening, merger-control requirements, sector approvals, and issues requiring deeper diligence before the parties sign an LOI.
Choosing the Transaction Structure
A stock purchase, asset purchase, merger, or joint venture can produce different liability, tax, transfer, and regulatory consequences. Deal Structuring should account for those differences before the parties commit to a transaction form.
Conducting Preliminary Foreign Investment Screening
Preliminary review should identify the ownership structure, regulated assets, material licenses, and jurisdictions connected to the transaction. When a foreign person may acquire interests in a U.S. .usiness, the parties should consider whether CFIUS jurisdiction or a mandatory filing requirement could apply.
2. Loi and Exclusivity Period Management
The LOI can establish the commercial framework while preserving issues for negotiation in the definitive agreement. Its provisions should clearly identify which terms are binding and address governing law, confidentiality, exclusivity, and other obligations intended to operate before closing.
Managing Exclusivity and Preliminary Deal Terms
Exclusivity provisions can restrict a target from pursuing competing transactions during an agreed period. The drafting should define the duration, prohibited conduct, termination events, and any agreed consequences if the proposed transaction does not proceed.
Identifying Regulatory Timing before Signing
The parties can use the LOI stage to identify potential filing obligations before finalizing the acquisition agreement. Early analysis is particularly relevant when CFIUS, antitrust review, or sector-specific approvals may affect the expected closing date.
3. Comprehensive Cross-Border Due Diligence
Once the transaction advances, due diligence should move beyond preliminary corporate records and examine the target's legal and regulatory exposure. Corporate Due Diligence may cover ownership, authority, contracts, intellectual property, employment matters, litigation, licenses, sanctions exposure, and change-of-control provisions.
Reviewing Regulatory and Operational Exposure
Cross-border diligence may require review of foreign licenses, permits, regulatory history, labor obligations, environmental requirements, and industry-specific restrictions. Local-law analysis may also be necessary when subsidiaries, assets, employees, or required consents are located in another jurisdiction.
Addressing Tax and Transaction Structure
The transaction structure can affect tax treatment, withholding obligations, and the allocation of liabilities between the parties. Cross-border tax analysis may also require consideration of applicable treaties and tax consequences arising in more than one jurisdiction.
4. Definitive Agreement and Risk Allocation
Due diligence findings and regulatory requirements should feed directly into the definitive acquisition agreement. A cross-border M&A attorney may address identified risks through representations, warranties, covenants, indemnification provisions, termination rights, and conditions to closing.
Representations, Indemnification, and Earnouts
Representations and warranties can allocate risks identified during diligence, while indemnification provisions can establish procedures for specified post-closing claims. When an earnout is used, the agreement should define performance metrics, accounting principles, measurement periods, and operating rules affecting contingent consideration.
Governing Law and Dispute Resolution
International agreements should distinguish governing law from jurisdiction, venue, and dispute-resolution procedures. General Obligations Law § 5-1401 permits parties to qualifying contracts involving at least $250,000 to agree that the state's law will govern their rights and duties, even without another reasonable connection to the state. Statutory requirements and exceptions still apply.
5. Regulatory Approvals and Cross-Border Closing
Regulatory approvals can affect the timing and conditions of a cross-border acquisition. The parties should identify required foreign investment, antitrust, and sector-specific approvals before setting outside dates and closing conditions. Transaction documents can then allocate filing responsibilities, regulatory cooperation obligations, and the consequences of delayed or conditional approval.
Coordinating Cfius Review with Deal Terms
When CFIUS review may affect an acquisition, the transaction documents should address filing responsibility, regulatory cooperation, closing conditions, and any agreed response to mitigation requirements. The parties should determine separately whether the transaction is subject to CFIUS jurisdiction and whether a filing is mandatory or voluntary. A CFIUS Compliance analysis can address those filing questions without turning the acquisition agreement itself into the primary source of CFIUS compliance obligations.
Aligning Regulatory Timelines with Closing
When the parties submit a formal CFIUS notice, the statutory review period can run for up to 45 days, followed by an investigation of up to another 45 days when required. An additional 15-day investigation extension is available in extraordinary circumstances. Acquisition agreements should account for these periods, filing preparation, government requests, potential mitigation, outside dates, and other regulatory approvals affecting closing.
Hsr and Other Merger-Control Approvals
Federal antitrust rules can apply even when a party to an acquisition is organized outside the United States. For transactions closing on or after February 17, 2026, the minimum HSR size-of-transaction threshold is $133.9 million, although other statutory requirements and exemptions still determine reportability. Other jurisdictions may impose separate notification thresholds and waiting periods, so Merger Clearance planning should account for those regimes when setting regulatory covenants, outside dates, and closing conditions.
6. Frequently Asked Questions
What should parties review before signing a cross-border acquisition agreement?
Parties should evaluate due diligence findings, required regulatory approvals, representations and warranties, indemnification provisions, governing law, termination rights, and conditions to closing.
How long can the CFIUS review process take?
After CFIUS accepts a formal written notice, the initial review can run for up to 45 days. An investigation can add up to 45 days, with one additional 15-day extension available in extraordinary circumstances.
Does exceeding $133.9 million automatically require an HSR filing in 2026?
No. The $133.9 million threshold applies to transactions closing on or after February 17, 2026, but HSR reportability also depends on other statutory requirements and applicable exemptions.
04 Aug, 2026
