Document background
The Letter of Intent Mergers and Acquisitions is a crucial preliminary document in Saudi Arabian M&A transactions, typically used after initial discussions but before detailed due diligence and definitive agreements. It serves to memorialize the parties' preliminary understanding and set the framework for further negotiations. The document must comply with Saudi Arabian legal requirements, including Companies Law, Competition Law, and Shariah principles. It typically contains both binding elements (such as confidentiality and exclusivity) and non-binding elements (such as proposed transaction terms). This document is particularly important in the Saudi Arabian context where business relationships and preliminary agreements carry significant weight in commercial transactions. The LOI helps establish clear parameters for the transaction while allowing flexibility for detailed terms to be negotiated in the final agreements.
