M&A Due Diligence NDA Hub

An M&A Due Diligence NDA protects confidential information shared during merger and acquisition discussions. Unlike standard business NDAs, M&A NDAs typically include stronger provisions such as standstill clauses (preventing hostile takeovers), non-solicitation of employees, strict data room access controls, and provisions for handling the agreement after deal completion or termination.

Typically, the seller (target company) proposes the NDA since they are disclosing more sensitive information during due diligence. However, sophisticated buyers often have their own preferred forms. The party with more leverage in the negotiation usually gets their form accepted with negotiated modifications. Investment bankers often provide a "market-standard" form to break deadlocks.

A standstill clause prevents the potential buyer from making unsolicited offers, acquiring shares in the open market, soliciting proxies, or launching hostile takeovers for a specified period (typically 12-24 months). This protects the seller from having their disclosed confidential information used against them in an unwanted acquisition attempt while allowing controlled, negotiated discussions to proceed.

M&A NDAs typically have confidentiality periods of 2-3 years for general business information. Trade secrets and truly proprietary information may be protected indefinitely. Standstill provisions usually last 12-24 months from signing. The term should align with how long the information retains competitive value and market sensitivity.

Upon deal closing, the NDA is typically superseded by the definitive purchase agreement, which contains its own confidentiality provisions. Most M&A NDAs include a provision stating they terminate upon closing. However, certain obligations (like non-solicitation or specific pre-closing disclosure protections) may survive or be incorporated into the purchase agreement.