Closing conditions (CPs)

Definition

The SPA gets signed today. Closing happens 4-12 weeks later. In between sits a list of events that must occur for both parties to be obligated to close. These are conditions precedent: "CPs" in market jargon: and they shape the entire signing-to-closing risk profile of any Benelux mid-market deal.

The standard CP stack in 2026. In our practice we see a typical Benelux mid-market SPA contain 6-12 conditions precedent: (1) antitrust clearance from the Belgian Competition Authority or Dutch ACM where the merger-control thresholds are met (most relevant: combined Belgian turnover >€100m + each party >€40m, or Dutch turnover >€150m + each party >€30m); (2) buyer financing: confirmed lender commitments at closing; (3) key third-party consents: landlord change-of-control, top-customer/supplier consent where contracts require, IT/SaaS contract assignments; (4) no MAC trigger between signing and closing (see [[mac-clause]]); (5) regulatory clearances if applicable (financial services, healthcare, FDI screening under Dutch Wet Vifo or Belgian FDI); (6) seller delivery of agreed corporate documents (board resolutions, releases, escrow deposits); (7) accuracy of seller reps at closing (bring-down certificate).

The FDI screening dimension is increasingly material in Benelux M&A. The Dutch Wet Vifo (Wet veiligheidstoets investeringen, fusies en overnames) came into force October 2023 and screens acquisitions in sensitive sectors including vital providers, sensitive tech, and dual-use goods. Belgium adopted its FDI screening law in mid-2023 covering similar categories. For 2026 deals where the target operates in critical infrastructure, defence-relevant tech, energy, or health, FDI screening typically adds 4-12 weeks to the signing-to-closing timeline and can become a CP itself: meaning the parties wait for clearance before they're obligated to close.

The most-disputed CP language: "reasonable efforts" vs "best efforts" vs "commercially reasonable efforts." Each is a different obligation standard. "Best efforts" is the highest standard (do everything legally possible). "Commercially reasonable efforts" is moderate (do what a reasonable similarly-situated party would). "Reasonable efforts" is the lowest. The differences become litigious when antitrust filings require structural remedies (divestitures), or when buyer financing requires lender flexibility. Best practice in 2026 Benelux mid-market: tie effort standards to specific actions (e.g., "make all filings within 10 business days," "respond to information requests within 5 business days") rather than abstract effort language.

What happens when a CP fails. Three paths in 2026 Benelux practice. (1) Permitted carve-out: if the failure falls within a permitted carve-out (e.g., MAC excludes general market events; antitrust failure where remedies are commercially unreasonable), either party can walk without paying reverse breakup fees. (2) Material CP failure outside carve-out: the affected party can either walk (with potential reverse breakup fee exposure for the breaching party: see [[reverse-breakup-fee]]) or waive the CP and proceed to closing. (3) Long-stop date: if CPs remain unsatisfied beyond the agreed long-stop date (typically 6-12 months from signing), either party can walk. The long-stop date is the practical limit on how long uncertainty can persist.

A worked Benelux example. A Liège engineering firm signs SPA in February 2026 with a Dutch strategic buyer at €22m equity value. CPs include: Belgian Competition Authority clearance (combined turnover €180m, well above threshold), buyer debt financing at €15m, customer-concentration consent (top-3 customers required to confirm contract continuity post-closing), no MAC, bring-down certificate. Belgian Competition clears in 8 weeks (no remedies required). Buyer financing commits at signing. Top-3 customers confirm. MAC: a €2m client cancels in May, but this is below the 10% revenue threshold defined in the SPA: not a MAC trigger. Closing happens 14 weeks after signing. Total CP-to-closing duration: 14 weeks.

Worked example

SPA equity value: €22m. CPs: 5 (BE Competition clearance, debt financing, customer consents, no MAC, bring-down). Total CP duration: 14 weeks. Competition clearance: 8 weeks (no remedies). Financing: committed at signing. Customer consents: 3/3 received. MAC test: €2m client cancellation = 8.5% revenue below 10% threshold: passes. Closing: 14 weeks post-signing.

When it matters

Every Benelux mid-market SPA has CPs. The art is in calibrating them: too few and the buyer carries unwarranted risk (no antitrust safety, no financing-out); too many and the seller carries unwarranted execution risk. The standard Benelux 2026 mid-market stack is 6-12 CPs. Effort standards should be tied to specific actions, not abstract language. Long-stop date typically 6-12 months from signing: beyond which uncertainty must end.

Frequently asked

Who pays the reverse breakup fee if a CP fails?

Depends on which CP. If the failed CP is on the buyer side (financing, antitrust failure due to buyer remedies) the buyer pays the reverse breakup fee. If on the seller side (failed customer consent, MAC trigger from seller-side event), the seller pays the forward breakup fee. If neither side caused the failure (regulatory denial, general market MAC), neither pays: both walk away. The specific allocation comes from the SPA fault-attribution clauses.

How long is a typical long-stop date?

In Benelux mid-market 2026: 6-9 months from signing for clean deals, 9-12 months when antitrust or FDI screening is involved. Beyond 12 months is unusual and signals deal-structure problems. The long-stop is the practical limit: beyond it, market conditions have likely changed enough that the deal no longer makes sense as originally structured.

Can a CP be waived after signing?

Yes: most CPs are bilateral protections that either party can waive. If a buyer-side CP fails (e.g., financing falls short), the buyer can waive it and proceed at risk. Seller-side CPs similarly can be waived. The CP that cannot typically be waived is antitrust clearance: regulators have to give actual approval, and the parties can't contract around that.