SOURCES OF CONTENTION IN M&A DISPUTES
Mergers and acquisitions (M&A) remain a vital means by which companies pursue strategic growth, diversification and market consolidation. Yet, while headline values often attract attention, the commercial and legal reality is that a significant proportion of deals give rise to disputes, frequently around valuation mechanics, earn-outs, completion accounts and post-deal covenants.
This article sets out the principal sources of contention in M&A disputes, and specifically valuation issues, warranty disputes and post-completion obligations.
The nature of M&A disputes
Disputes in the M&A context typically stem from divergent expectations between buyer and seller about the value, performance or condition of the target business. Those expectations are expressed and qualified in the share purchase agreement (SPA) or asset purchase agreement (APA) and should be supported by disclosure letters and other documents examined or generated during due diligence. But ambiguities, whether in drafting or in post-completion interpretation, often lead to litigation or arbitration.
Broadly, M&A disputes tend to fall into four categories: (i) valuation and price-adjustment disputes, including earn-outs, completion accounts and locked-box mechanisms; (ii) warranty and indemnity claims, where a buyer alleges that the seller misrepresented the condition or performance of the target; (iii) post-deal obligations, including restrictive covenants, transition services or cooperation in regulatory approvals; and (iv) fraud or misrepresentation, where a party claims deliberate concealment or manipulation of key information.
While each category has distinct legal foundations, valuation and post-deal obligations frequently overlap, particularly where the buyer’s expected return depends on post-closing performance.
Jan-Mar 2026 issue
Shakespeare Martineau