Document background
The Acquisition Letter of Intent (LOI) is a crucial preliminary document used in the early stages of merger and acquisition transactions in Saudi Arabia. It serves as a roadmap for the proposed transaction, outlining key terms, conditions, and the framework for further negotiations while respecting both international business practices and local legal requirements, including Shariah law principles. This document is typically prepared after initial discussions but before detailed due diligence and definitive agreements, containing elements such as indicative pricing, exclusivity periods, and confidentiality provisions. While most provisions are non-binding, certain elements like confidentiality and exclusivity are usually binding. The document must comply with Saudi Arabian commercial law and regulatory requirements, particularly when involving regulated sectors or foreign investors.
