Sale and Purchase Agreement (SPA)

Glossary

Banking

Sale and Purchase Agreement (SPA)

On the basis that the price of a corporate acquisition can shift between the time parties reach heads of terms and final closing, sale and purchase agreements are used extensively in M&A negotiations to fix purchase prices against target financials or to allow price adjustments if the financials of the entity being acquired divert in any way from what was agreed in the SPA. SPAs facilitate transactions and minimise disputes.

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