BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
5.3 Scope of Due Diligence The scope of due diligence depends on the activities of the target, the dynamics between the parties, whether warranty and indemnity insurance is taken out and the timeframe within which the due diligence has to be conducted. Although conducting due diligence is not com - pulsory, prospective buyers typically conduct operational, legal, financial and tax (including pensions and social security) due diligence over the target. Sometimes, technical and environ - mental due diligence may be undertaken, as well as an insurance audit. At the outset and throughout the due diligence process, manage - ment presentations and specific documents and information are made available to the potential acquirer, and its advisers, through a (typically virtual) data room. 5.4 Standstills or Exclusivity Standstill provisions are frequently included in non-disclosure agreements and are fairly com - mon in hostile takeovers. In private M&A trans - actions, standstill provisions are rather rare. It is common for potential buyers to request exclusivity for a relatively short period of one to three months. Such exclusivity clauses are typi - cally inserted in the offer letter or letter of intent, but parties may also enter into separate agree - ments on exclusivity. In public M&A, exclusivity is, however, not often granted (also in view of the target’s statutory obligations in case of compet - ing bids). In principle, the completion of a transaction in breach of an exclusivity clause or agreement will only result in the unwinding of the trans - action if it has been established that the third- party acquirer acted in bad faith (ie, that party was aware that the transfer would be a breach
of the exclusivity agreement). In that case, the third-party acquirer may also be held liable for damages. In all other cases of a transaction in breach of an exclusivity clause or agreement, the seller will, in principle, be exposed to dam - ages incurred by the potential acquirer that had obtained exclusivity. In any case, the negotiating parties should be cautious not to share information that could be qualified as insider information (eg, information that has not been made public relating to an issuer which, if it were made public, would be likely to have a significant effect on the prices of the (related derivative) financial instruments) as this may hinder a subsequent acquisition of the financial instruments. 5.5 Definitive Agreements While allowed, tender offer terms and conditions are rarely documented in a definitive agreement. Such agreements would potentially risk being qualified as behaviour of different potential acquirers acting in concert and therefore be subject to sanctions (for the definition of acting in concert, see 4.2 Material Shareholding Dis- closure Threshold ). 6. Structuring 6.1 Length of Process for Acquisition/ Sale The time taken to acquire/sell a business in Belgium may vary from a few weeks to several months. Private M&A Transactions With respect to private M&A transactions, the length of the transactional process will depend on the specific circumstances of the case. For instance, prior consents from regulatory authori -
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