Condition precedents in M&A transactions in Vietnam
Few months ago, a corporate client (the Buyer) requested me to assist in its purchase of 100% equity from the owners of a private university in Vietnam (the Sellers). The Buyer and the Sellers had worked together before and reached an agreement on the payment. Accordingly, the Buyer shall deposit 10% of the value of the sale and purchase agreement (the SPA) to the Sellers after signing the Memorandum of Understanding and the remaining 90% shall be paid after the Buyer and the Sellers sign the notarized SPA at a licensed notary office, and after the Sellers hand over all original legal documents in connection with the private university to the Buyer. This way of doing transaction was quite familiar in Vietnam 15-20 years ago. However, it is so risky for the Buyer if it follows this transaction structure when key steps in an M&A transaction, including without limitation, legal and financial due diligence are not done, which can help define the requirements that the Sellers must meet