Document background
The Merger And Acquisition Term Sheet is a critical preliminary document used in the early stages of M&A transactions in Hong Kong. It serves as a foundation document that captures the key commercial and legal terms agreed between parties before proceeding to detailed due diligence and definitive agreements. Under Hong Kong's legal system, which combines common law principles with local ordinances and regulations, this document typically includes essential elements such as transaction structure, purchase price, conditions precedent, and timing. While mostly non-binding, certain provisions like confidentiality and exclusivity are usually binding. The document is particularly important in Hong Kong's dynamic business environment, where M&A activities often involve both local and international parties, requiring careful consideration of Hong Kong's regulatory requirements, including those under the Companies Ordinance and Securities and Futures Ordinance.
