US/UK M&A: Disclosure

The disclosure exercise against the warranties contained in the share purchase agreement (SPA) is a common element of an M&A transaction on both sides of the Atlantic Ocean. In this article we will identify some of the different approaches taken in relation to disclosure in the UK and the US.

Specific and general disclosures

In both the UK and the US it is common for the warranties in the SPA to be qualified. In the UK this is done through disclosures set out in a separate disclosure letter, and in the US by disclosures set out in the disclosure schedules to the SPA itself. In the US, the disclosures are usually specific, and it is unusual for a disclosure to be general and qualify all the warranties – generally this is allowed only where the disclosure has clear relevance to another warranty. General disclosures of the contents of all (or portions of) the data room are often resisted.