M&A Foundations · glossary
Money held by an independent third party — often a solicitors' or dedicated escrow account — to secure future obligations. In M&A, typically a slice of the price held back as a ready fund for warranty or indemnity claims. Chapter 9
Explained in Chapter 9, Price Mechanisms and Adjustments, of M&A Foundations.
The last family of tools is about when the price is paid and how claims get funded, not how it is calculated. An escrow puts part of the price into a joint account with an escrow agent, usually a bank or the lawyers. That part of the price is released to the seller on agreed dates unless the buyer has notified claims. A retention is the same idea without the agent: the buyer simply holds part of the price back. Deferred consideration is different again: part of the price is…Read Chapter 9, Price Mechanisms and Adjustments →
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement.
Related terms
Where this term lives
This term is part of one complete fictional deal, with every document attached and a test after every chapter. Open M&A Foundations → · All terms A–Z →