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Comparing UK and US acquisition agreements

Will Pearce and William Tong

Davis Polk & Wardwell LLP

Tuesday 16 October 2018


Over the years, English law has become popular as a governing law for cross-border private M&A transactions even where the target has little or no connection with the UK. Aside from the perceived neutrality of, backed by the commercial flexibility and certainty of judicial interpretation offered by, an English law contract, one of the reasons for this is the perception that a UK-style agreement and related market practice is seller-friendly. By contrast, a US-style agreement and related market practice is regarded by some as more buyer-friendly. One fundamental reason for this difference is that UK market practice tends to regard economic risk as transferring from the seller to the buyer at the point of signing the acquisition agreement rather than at closing, whereas, in contrast, US market practice tends to regard economic risk as transferring to the purchaser at the point of closing.

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