Mergers and acquisitions across East Africa have accelerated as regional integration deepens and investors look for scale. But a transaction that looks straightforward on a term sheet can unravel quickly without careful legal structuring and rigorous due diligence.
Due diligence is non-negotiable
Before signing, a buyer must understand exactly what it is acquiring. Legal due diligence examines corporate records, contracts, litigation exposure, employment obligations, tax history, and regulatory compliance. In cross-border deals, it also covers how the target sits within different national legal systems.
Regulatory and competition approvals
Many transactions require clearance from national regulators and, where thresholds are met, the COMESA Competition Commission. Failing to obtain approvals before completion can void a deal or trigger significant penalties.
Structuring the deal
Whether the transaction is structured as a share purchase or an asset purchase has major consequences for liability, tax, and the transfer of contracts and licences.
- Share purchase: the buyer acquires the company with its assets and liabilities intact.
- Asset purchase: the buyer selects specific assets and typically leaves historic liabilities behind.
Protecting value after closing
Well-drafted warranties, indemnities, and earn-out provisions allocate risk fairly and protect the price the buyer agreed to pay. Integration planning should begin well before completion.
Shebah Law Firm advises buyers and sellers on the full deal lifecycle, from due diligence and structuring to negotiation and regulatory clearance.
This article is for general information only and does not constitute legal advice. For guidance on your situation, please book a consultation.
