Signing to Completion

13.1Why deals happen twice

Chapter 1 set out the rule: signing makes the contract binding; completion transfers the shares and the money. If nothing needs to happen in between, the parties do both on the same day — a simultaneous signing and completion. The deal splits into two events only when something must happen first that the parties cannot simply agree away. No amount of drafting lets a buyer own a regulated firm without the regulator’s blessing.

The classic reasons for a split are: a regulatory approval — by far the most common in financial services, where a change of ownership needs prior consent; merger control clearance, where the deal is big enough to interest competition authorities; financing, where the buyer’s money arrives only at a future drawdown (though English private deals usually expect the buyer to sign with “certain funds” rather than a financing condition); and a pre-completion reorganisation, where the seller must first carve the target out of a wider group. Whatever the reason, the mechanics are the same. The SPA lists conditions precedent: things that must happen before either side is obliged to complete. The wait between signing and completion is known as the gap.

13.2The approval landscape — what a junior should be able to name

You need not be a regulatory specialist to work the gap, but you should be able to name the three families of approval that create it. First, change-of-control regimes in financial services. Almost every licensed financial business — banks, payment and e-money institutions, brokers, fund managers, and now crypto-asset service providers — sits under a rule that says its owners must be approved. In the EU, MiCA applies this to CASPs like Solaris through the qualifying-holding regime. The UK equivalent lives in the Financial Services and Markets Act 2000. A proposed controller must notify the FCA (or PRA) under section 178 FSMA, and the regulator assesses the buyer’s fitness within a statutory 60-working-day clock. The regulator can stop that clock by asking for further information, which it almost always does.

Second, merger control — competition (antitrust) review of acquisitions. Deals above turnover or market-share thresholds may need clearance from the European Commission (for “concentrations with an EU dimension”) or the UK’s Competition and Markets Authority. UK notification is technically voluntary, but the CMA can call deals in and unwind completed ones, so on any deal with a UK overlap the question is analysed, not ignored.

Third, foreign investment and national security screening. The UK’s National Security and Investment Act 2021 makes notification mandatory where the target’s activities fall within defined sensitive sectors (among them artificial intelligence, data infrastructure, energy and defence). A notifiable acquisition completed without approval is void. The Act also gives government call-in powers beyond the mandatory sectors, and most developed economies now have an equivalent. The practical lesson for multi-jurisdiction deals: someone must run a filing analysis early — which regimes are triggered, where, and on what timetable. The analysis must come early because the slowest filing sets the deal’s timetable and the long stop date.

13.3Drafting the conditions — clause 5 as the model

Here is the Sunrise conditions clause in full. Notice how little of it there is:

That brevity is deliberate, and it reflects the seller’s core drafting principle: every condition is an escape hatch. A buyer who is obliged to complete “subject to conditions” is, to that extent, not obliged to complete at all. So well-advised sellers insist that conditions be few (only what the law genuinely requires), objective (a regulator either has or has not approved — no room for argument), and outside either party’s whim. A condition that the buyer’s board must approve the deal, or that the buyer must be “satisfied” with something, hands the buyer a free option to walk away; sellers rarely accept one.

Because the deal cannot complete without the approval, the SPA must say who carries the risk of getting it. That is done with an obligation to try, and English drafting grades the effort on the endeavours ladder. “Reasonable endeavours” is the gentlest rung: the obligor may weigh its own commercial interests and need only take one reasonable course. “All reasonable endeavours” sits in the middle: exhaust the reasonable courses open to you, even at some cost and inconvenience. “Best endeavours” is the top rung: do everything a determined, prudent buyer acting in its own interest would do, at real commercial cost — though not to the point of ruin. Courts do give the phrases different weight, and the higher rungs can bite: in Jet2.com v Blackpool Airport the airport had to keep handling flights outside normal hours at a loss. Beyond the ladder altogether lies the US concept of a hell-or-high-water clause: the buyer must do whatever it takes to get clearance — divestments, undertakings, the lot. English private deals use it rarely; US antitrust practice knows it well.

Then comes the counterweight. Clause 5.3 says nothing requires the Buyer to accept any condition or undertaking imposed with the approval that would be “materially adverse to the business of the Buyer’s group taken as a whole”. Regulators do not always say a clean yes: approval may come with strings — capital injections, governance undertakings, business restrictions. Clause 5.3 means Atlas can decline strings of that severity, even if the refusal means the condition fails. Sellers push back hard, and you should see why: every widening of what the buyer may refuse widens the buyer’s exit. The negotiation is over the threshold — here the seller-friendly “materially adverse … taken as a whole”, a deliberately high bar. The seller’s own contribution is clause 5.4: an obligation to provide, and to make the target provide, all information and assistance reasonably required. Most of what the regulator wants to know concerns the target itself.

13.4The long stop date — how long is too long

A conditional contract needs an expiry. Without one, a deal whose approval never comes would leave both parties bound — the seller unable to sell elsewhere, the buyer’s capital committed — indefinitely. The answer is the long stop date (US lawyers say “outside date” or “drop-dead date”): a date after which, if the conditions remain unsatisfied, the parties can call time.

The date is not plucked from the air: it is built from the regulator’s statutory clock plus a buffer. Sunrise signed on 14 July 2026. The filing is due within 15 Business Days, so around 4 August. The CBI then has 60 working days, and the clock can be paused once — for up to 20 working days (30 in some cases) — if the regulator asks for further information. So a realistic answer lands in late 2026. The Long Stop Date of 31 March 2027 adds months of headroom for stopped clocks, resubmissions and holidays. Too tight a long stop manufactures a crisis; too long leaves the seller in limbo — expect sellers to argue for shorter, buyers for longer.

Note three things about the mechanics. Termination is by written notice, not automatic — if neither party pulls the trigger, the contract limps on and the conditions can still be satisfied. A party whose own breach of clause 5 caused the failure may not terminate: a buyer who filed late, in breach, cannot ride its own delay out of the deal. And termination is not total amnesia: accrued rights survive (a claim for that filing breach lives on), together with the housekeeping clauses — confidentiality, entire agreement, notices, costs and governing law.

13.5Life in the gap — running someone else’s company, almost

Atlas priced Solaris on a locked box date of 31 December 2025 (Chapter 9), diligenced it in spring 2026, and will own it around the end of the year. Between signing and completion the Seller still owns and runs the business — but the Buyer has paid-for expectations about what it will receive. Clause 6 protects them, starting with the general rule:

The ordinary-course covenant sets the tone: keep the business the buyer diligenced. But “ordinary course” is a standard, and standards invite argument — so clause 6.2 adds a specific consent list: things the target may not do without the Buyer’s prior written consent. Walk the list and each entry has a one-line logic:

A consent list needs a consent process, because the business cannot stop breathing for six months. Under clause 6.3 the Buyer’s consent must not be unreasonably withheld or delayed — the Buyer cannot use the list as a lever for something else, like a price chip. Under the same clause, consent is deemed given if the Buyer does not respond within five Business Days of a written request. Deemed-consent provisions exist because sellers have been burned by buyers who simply go quiet; for the buyer’s junior lawyer they are a live diary point, because silence is now an answer.

Within those limits, the Buyer does get to look. Clause 6.4 gives Atlas and its advisers reasonable access to senior management and the books, on notice and during Working Hours, for integration planning. Planning is the operative word. Preparing the day-one plan is fine; issuing instructions is not. And because the Buyer cannot watch everything, clause 6.5 makes the Seller a tripwire. The Seller must promptly notify the Buyer of anything that is a material breach of the Warranties or that is reasonably likely to stop a Condition being satisfied.

13.6The MAC question — who bears the risk of a changing world?

One protection is conspicuously absent from the Sunrise SPA, and the absence is the lesson. A material adverse change (MAC) condition — US lawyers say “material adverse effect” — lets the buyer refuse to complete if something sufficiently terrible happens to the target between signing and completion. MAC conditions are standard in US private deals. In English private practice they are rare: the market culture prizes deal certainty, and sellers usually hold the pen in competitive auctions. A buyer who asks for a MAC is asking for an option the seller is rarely forced to give.

Where a MAC is used, it is built in three layers: a broad definition (an event materially adverse to the business, assets or financial condition of the target); carve-outs for market-wide events — macroeconomic shifts, war, pandemics, changes of law — which stay with the buyer as ordinary market risk; and a disproportionality test clawing a carve-out back if the target is hit disproportionately harder than its peers. Even then, MACs are famously hard to invoke: courts set the bar at durationally significant, company-threatening harm. In the US the Delaware courts did not uphold a buyer’s MAC termination until Akorn v Fresenius in 2018. A MAC is a lottery ticket, not an umbrella.

13.7What the deal team actually does in the gap

From the outside the gap looks like waiting. From inside a law firm it is project management, and much of it lands on the most junior lawyer. The deliverable is a completion that is boring, because everything was ready a week early. Your standing checklist:

• Own the CP checklist. One live document listing each Condition, its status, who is chasing it and the evidence of satisfaction — circulated regularly to both sides.
• Support the regulatory filing. The regulator asks the Buyer about the target, so you will be gathering information from the target’s team under clause 5.4 — structure charts, financials, controllers’ details — and keeping correspondence organised.
• Draft the completion agenda early and circulate it. The step-by-step script of who delivers what at completion; agreeing it early flushes out missing documents in time.
• Prepare the completion documents in agreed form. Board minutes, directors’ and secretaries’ resignations, powers of attorney, stock transfer forms — the ancillary documents that Schedule 2 requires.
• Build the funds flow memo with the finance team. Every euro from the Buyer’s account to the Seller’s Solicitors’ client account under clause 7.3 — amounts, account details, and who confirms receipt.
• Schedule the completion call and confirm availability of every signatory — diaries are the most common point of failure.
• Diarise the deadlines: the 15-Business-Day filing deadline, every regulator response date, the five-Business-Day consent windows, and the Long Stop Date itself — with reminders far enough ahead to act on.

13.8When the gap goes wrong

Three failure modes matter. First, the condition fails: the regulator refuses, or offers approval on terms the Buyer properly declines under clause 5.3, or simply has not decided by the Long Stop Date. Then clause 5.5 operates: either innocent party may terminate by notice, and a party whose breach caused the failure may not.

Second, the conditions are satisfied but someone fails to show up. Refusing to complete when the conditions are met is not condition failure — it is breach of contract. The SPA gives the innocent party a menu in clause 7.4: proceed so far as practicable, defer completion by up to ten Business Days (once), or terminate with accrued rights intact. Completion mechanics get their own chapter — see Chapter 15.

Third, the dead deal’s bill. Months of lawyers, accountants and management time produce no completion and, under clause 16.1, each party bears its own costs — the English default, absent a negotiated break fee. It is one more reason sellers resist conditionality: a year off the market, books opened to a competitor’s owner, and nothing to bill.

13.9The Sunrise gap on one page

Here is the Sunrise gap as one timeline — signing, filing, a clock that stops and starts, approval, a short mechanical run to completion, and a backstop behind it all:

Test yourself below, then on to Chapter 14 — how all of these positions actually get negotiated.