Brief Definition
Acquisition provisions are specific terms and conditions included in a contract or agreement that outline the details of acquiring one company by another.
Further Explanation
Acquisition provisions are specific terms and conditions included in a contract or agreement that outline the details of acquiring one company by another. These provisions address various aspects of the acquisition process, such as the purchase price, payment methods, timeline, representations and warranties, and conditions that must be met before the acquisition is finalized. They ensure that both parties understand their rights and obligations and help to prevent disputes during and after the acquisition.
Example: Company A is acquiring Company B. The acquisition provisions might state that Company A will pay $5 million in cash and $2 million in Company A’s stock to Company B’s shareholders. It might also include a provision that the acquisition will only proceed if Company B meets certain financial performance targets within a specified period.