Question

Which of the following documents are typically considered key in the first round of a merger and acquisition (M&A) process?

A) Letter of intent (LOI) and definitive purchase agreement.
B) Due diligence report and financial statements.
C) Non-disclosure agreement (NDA) and business valuation.
D) Shareholder approvals and regulatory filings.

Answer 1

The first round of an M&A process typically involves a Letter of Intent (LOI) and a Non-disclosure Agreement (NDA), which express preliminary agreements and protect confidentiality, respectively.

Step-by-step explanation:

In the first round of a merger and acquisition (M&A) process, the key documents are typically the Letter of Intent (LOI) and the Non-disclosure Agreement (NDA). The LOI expresses a preliminary agreement or understanding between the parties involved, prior to a final agreement. Meanwhile, the NDA ensures that confidential information exchanged during the M&A process is not disclosed to any third parties. While other documents like due diligence reports, financial statements, shareholder approvals, and regulatory filings are also crucial, they generally come into play at later stages of the M&A process.