Pre-Transaction Confidentiality Agreements: Sword Or Shield?

A recent lawsuit has again highlighted the importance of the terms of confidentiality agreements entered into between potential targets and acquirers in advance of an M&A transaction.

Background

It is usual practice in both the public and private M&A context that bidders who are looking at acquiring either the assets or shares of a target company in a consensual deal will first be expected to negotiate and enter into a form of non-disclosure agreement (NDA) or confidentiality agreement (CA). The CA will often provide standard protections for the non-public or confidential information that the target entity may share with the potential acquirer as part of the due diligence process that may be undertaken in advance of a potential M&A transaction.