This book serves as a guide for drafters of Mergers & Acquisitions (M&A) contracts, focusing on purchase price adjustment tools, manipulation issues, and calculation standards, along with the inter-relationship of relevant clauses. Chapter 2 outlines the fundamentals of M&A, including definitions, motives, and phases of the process. Chapter 3 introduces company valuation methods, essential for understanding purchase price adjustments and preventing manipulation. Chapter 4 highlights various guarantees under German law, emphasizing that breaches can lead to purchase price adjustments, and stresses the importance of precise clause formulation to avoid unintended consequences. Chapter 5 delves into the two primary tools affecting purchase price: retrospective adjustments (post-closing) and future-oriented adjustments (earn-outs). It discusses their differences, advantages, disadvantages, appropriate metrics, manipulation issues, and calculation methods to assist drafters in addressing common challenges. Chapter 6 briefly touches on dispute resolution issues in international M&A transactions, noting that arbitration may not always adhere to established international rules. Finally, Chapter 7 addresses the coordination of clauses that indirectly influence purchase price, underscoring the complexity of M&A contract drafting.
