Romanian M&A · Pre-acquisition negotiation

The first signed document in a Romanian company acquisition can shape the price, timetable and negotiating leverage long before the share purchase agreement is ready. A term sheet should tell both sides what they are exploring, what remains open and which limited commitments take effect immediately.

What does a term sheet do in a Romanian company acquisition?

A term sheet records the principal negotiating parameters before the definitive acquisition documents are prepared. Its legal effect depends on the actual wording and parties’ conduct, rather than its title alone.

It may be called a letter of intent, memorandum of understanding, heads of terms or indicative offer. The useful question is not which label appears at the top. Ask whether it is a framework for continuing discussions, a set of immediately enforceable process obligations, or a commitment to enter into a future transaction on sufficiently settled terms. Romanian Civil Code rules on negotiations, confidentiality and promises to contract make that distinction important.

This article concentrates on a private acquisition of shares or social parts in a Romanian company, particularly an SRL (limited liability company). For an SRL the interests are părți sociale and the owners are asociați; an SA has shares (acțiuni) and shareholders (acționari). “Share purchase agreement” or SPA is a common international deal label; the definitive instrument for an SRL must reflect the actual transfer of social parts. An acquisition of specified assets, a minority investment, a joint venture or a regulated-company takeover can require a different document set and approval analysis. Our guide to the Romanian share purchase agreement covers warranties, conditions, closing and post-signing risk allocation in the later contract. The term sheet should set the negotiating direction without trying to replace that work.

The best early draft also names the real decision-makers. A founder might be negotiating, while another shareholder must approve the sale. A parent might propose to buy, while a different group company will sign the SPA. Identifying the parties avoids vague promises that cannot be carried into final documents without reopening the commercial deal.

Which term-sheet provisions can bind the parties?

A clearly drafted term sheet can leave the proposed sale non-binding while making specified process clauses binding. Each binding clause should be identified expressly, with its parties, start date, duration and consequences.

Article 1183 of the Romanian Civil Code recognises freedom to begin, continue and end negotiations, subject to good faith. Starting or continuing talks without a genuine intention to conclude a contract is an example of conduct contrary to good faith. Ending talks, or simply failing to complete the acquisition, does not itself create liability: a claim requires conduct contrary to good faith and proof of the resulting loss under the applicable rules. Article 1184 addresses confidential information communicated during negotiations. A separate non-disclosure agreement can make scope, permitted recipients, use, return or destruction of materials and remedies more practical. It should also address information shared with lenders, advisers and potential co-investors.

A general heading that says “non-binding” may sit awkwardly beside mandatory language such as “the parties shall sell and purchase” or “the seller irrevocably agrees”. Article 1279 governs a promise to contract where the required elements of the promised contract are sufficiently identified. A detailed term sheet does not automatically become a promise: its wording, the parties’ intention, the applicable law and their conduct determine which, if any, commitments were undertaken. A duty to negotiate in good faith differs from a promise to conclude the transaction, and both differ from the definitive sale contract. Confidentiality or exclusivity may bind even while the proposed acquisition does not. Counsel should inspect any deposit, break fee or commitment to sign as a possible obligation in its own right.

Draft the boundary directly: identify the paragraphs that bind immediately and state that the contemplated acquisition remains subject to final documentation and any listed approvals. A good-faith negotiation clause should not be used to imply that either party must accept unresolved price, warranty or liability terms. Equally, a non-binding sale proposal does not authorise misleading conduct or misuse of confidential material.

How should the proposed deal be described?

Specify the target entity, seller’s interest, acquisition percentage, legal route and any debt or assets treated separately. The same headline percentage can produce very different economic and control outcomes.

For an SRL, social parts are governed by Company Law no. 31/1990. Under Article 202(2), unless the articles of association provide otherwise, a transfer of social parts to a person outside the company requires approval by associates (asociați) representing at least three quarters of the share capital. Article 203 requires entry in the Trade Register and the company’s register of associates; the transfer produces effects against third parties only from its entry in the Trade Register. The timing and effects between buyer and seller depend on the transaction documents and the steps actually completed, while third-party opposability follows the statutory registration rule. Older guides may still describe an opposition and publication procedure removed by Law no. 223/2020; check the current filing route. Read the actual articles before treating a founder’s agreement as sufficient. Other associates may have contractual pre-emption, consent or drag rights that also need checking.

Clarify whether the term sheet describes a purchase of all the shares, a majority stake, a staged acquisition or a capital increase. In a subscription, the money may go into the company; in a purchase of existing interests, the purchase price generally goes to the seller. Combining the two changes dilution, governance and the sources of funds available to grow the business. Any shareholder loan, founder current account, intercompany balance or guarantee should be listed separately rather than assumed to pass with the shares.

For an asset deal, specify which assets, contracts, employees, permits, liabilities and intellectual property are intended to move. Different assignment, consent, employment and tax questions can arise. If the transaction transfers an undertaking, business unit or part of one within the scope of Law no. 67/2006, employment rights and obligations may transfer by operation of law and information and consultation duties may arise; the result depends on what actually moves, not only the deal label. The investment-screening rules can also reach certain acquisitions of tangible or intangible assets in specified sensitive sectors, so an asset structure does not automatically avoid that review. Reclassifying a deal later can make a negotiated price or exclusivity period unworkable. The initial description should be accurate enough to guide due diligence, but can expressly preserve alternative structures pending tax and legal review.

How much of the price mechanism belongs in the term sheet?

Record the basis of the headline value and the main adjustments. A number without a definition of debt, cash, working capital and transaction perimeter does not tell either side what will be paid.

Distinguish enterprise value from equity value. Ask whether the business is sold on a cash-free, debt-free basis, whether a normalised working-capital level is assumed and how financial debt, tax debt, leases, shareholder loans, unpaid dividends and transaction expenses will be treated. If the target has multiple entities, name exactly which interests the price covers and whether real estate, IP or non-core assets stay inside the perimeter.

A locked-box approach normally uses a historic accounts date and protection against value leaving the business before completion. Completion accounts instead adjust the consideration using agreed closing-date metrics. At term-sheet stage, decide which route is intended, what information supports it and what remains to be defined in the SPA. The accounts date, accounting policies, debt and working-capital definitions and dispute mechanism require detailed drafting later.

Where part of the price is an earn-out, specify the performance period, metric and who controls decisions that affect it. A founder seller may expect an additional payment after staying with the target; the buyer may want operational freedom. A vague “up to EUR X based on future results” can move a major disagreement to after closing. Likewise, a deposit, escrow or holdback needs an identified holder, release condition, use and return mechanism. Do not transfer money solely because a short indicative document contains a headline price.

What does the commercial response map show?

Each line in the term sheet should connect to a document, a decision and an owner. Select a row to see the question management should resolve before signature.

How should exclusivity and confidentiality work?

Exclusivity should be limited in time and scope, tied to an actionable diligence timetable. Confidentiality should control information use and permitted recipients, even if the acquisition never signs.

A seller gives something valuable when it removes the business from the market. Define whether the promise prevents soliciting new offers, continuing existing talks, furnishing information to other bidders or concluding a competing deal. Identify the companies, shareholders and advisers covered, and carve out disclosures required by law or already owed to third parties. A buyer should have enough time for meaningful diligence, financing and approvals, while the seller needs a clear end date and objective progress points.

One workable structure is a short initial period that expires automatically unless the buyer supplies a defined diligence request, completes a management meeting or delivers a draft SPA by agreed dates. These are commercial examples, not default legal deadlines. Extensions should require an affirmative written decision rather than pass unnoticed. A “break fee” is not automatically a penalty clause. Its legal character depends on the trigger, purpose, drafting, relationship to loss and applicable law. Where Romanian law applies and the provision is a penalty clause, Articles 1538 and 1541 of the Civil Code may matter: a court can reduce it under the statutory conditions if the penalty is manifestly excessive compared with the loss the parties could foresee when the contract was made.

For the data room, limit access to identified team members and advisers. Decide whether the buyer may contact employees, customers, banks or suppliers, and whether the parties are competitors. Sensitive pricing and strategy data may require a restricted review team. When employee or customer personal data are involved, the EU General Data Protection Regulation requires the parties to identify their actual roles, purposes and lawful basis, limit access to necessary information and meet applicable transparency and security duties. Use anonymised or aggregated data where it will answer the diligence question; give particular care to payroll, evaluations and health information. Access from outside the EEA may also require a separate international-transfer analysis. An NDA or confidential data room does not replace these obligations.

Which conditions and approvals should be screened before signing?

The term sheet should identify plausible deal-stoppers and allocate who investigates them. A definitive condition can be drafted later, but a promised completion date is unreliable if the parties ignore corporate, tax, competition or investment approvals now.

Start with corporate title, associate or shareholder rights, pledges, financing restrictions, change-of-control clauses and licences. A seller may control a majority economically but still need a corporate resolution or third-party consent. For merger control, check whether the deal is a concentration and whether the relevant turnover and jurisdictional thresholds under Competition Law no. 21/1996 or, where applicable, the EU Merger Regulation are met. Purchase price alone does not establish whether notification is required; a non-notifiable arrangement may still need a separate competition-law review of its clauses or conduct.

Romanian investment screening under Emergency Ordinance no. 46/2022, as amended by Emergency Ordinance no. 17/2026, can cover foreign direct, EU and certain new investments where the statutory definitions and sector conditions are met. Article 3 sets a general value threshold exceeding EUR 5 million, calculated using the prescribed exchange-rate date. An investment at or below that amount may still be examined under the specific security, public-order or EU-interest conditions. Under Article 3(2²), certain interdependent operations within one year are treated as one investment and a filing duty arises when their combined value reaches EUR 5 million. The 2026 amendments also cover defined acquisitions of tangible or intangible assets in sensitive sectors. Screen the actual investor, target activity or assets, rights acquired, value, connected transactions and the applicable published procedural rules. The Competition Council’s 2025 investment-screening instructions address valuation, notification and control; their application must be checked against the amended 2026 framework and any subsequent rules. Those instructions envisage a filing after the material deal terms are settled but before implementation, supported by a document evidencing the intended investment. A signed term sheet does not substitute for an authorisation; where clearance is required, do not implement the investment before authorisation. Unauthorised implementation can attract statutory sanctions.

An SRL social-part transfer also needs a registration and tax workstream. The ONRC’s current transfer checklist includes the registration application, corporate resolution, updated articles, identification documents, proof of notifying the central tax authority, a tax attestation certificate and other documents according to the case. Under Article V of Law no. 239/2025, as amended, the seller, buyer or company must notify that authority of the transfer instrument and updated articles within 15 days of the transfer. If the company has the tax debts or budgetary claims specified there, security and proof of the tax authority’s agreement to that security may be needed for registration. ONRC currently says that, until the joint implementing order enters into force, the applicant supplies the tax attestation certificate. This fiscal opposability process is separate from the third-party registration effect under Article 203(2) of Company Law. Check the live ONRC list and tax procedure before filing. Existing shareholder-change guidance covers the procedural stage; a separate SPA guide explains definitive closing conditions. In the term sheet, assign responsibility for the tax notice, certificate, any security and registry filing, and set a realistic sequence and long-stop mechanism.

What should the buyer investigate during the exclusivity period?

Diligence should test assumptions that could change price, structure, closing conditions or the decision to proceed. A long list of documents is useful only when findings feed back into the deal.

Start with a prioritised request list: corporate records and shareholder title; recent accounts and debt; material customer and supplier contracts; security and guarantees; tax filings and disputes; permits; employment and key-person arrangements; property and leases; intellectual property; technology and data processing. Sector-specific issues can take priority. For a licensed operator, regulatory continuity may matter more than a minor contract warranty. For a software target, source-code ownership and contractor assignments may be central.

Do not make all diligence an undefined subjective escape route. A buyer can reserve a satisfactory-review condition, but the parties should understand whether the indicative value assumes no material undisclosed debt, no loss of a major contract and a defined financial baseline. Where there is a known issue, record whether it must be fixed, priced, insured, specifically indemnified or expressly accepted. The SPA can carry the final mechanism once evidence is available.

Data-room access should have a clear beginning and end. Preserve document versions and a Q&A log, distinguish information supplied by the target from informal remarks, and give both teams a controlled channel for new disclosures. This reduces disputes about what was shown and when. For a cross-border buyer, agree translation priorities early so the limited review time is spent on material Romanian documents rather than a last-minute full archive.

How do governing law, costs and the timetable fit together?

Choose the law and dispute mechanism for binding term-sheet clauses, allocate exploratory costs and distinguish target dates from enforceable obligations. The term sheet and definitive SPA can have different governing-law choices, but their interaction must be clear.

Cross-border parties often reuse an overseas template. This can create uncertainty if the binding provisions name one law, the later SPA is expected to use another and Romanian corporate steps cannot be displaced by either choice. Specify which court or agreed dispute forum addresses exclusivity or confidentiality disputes, and check the formal validity of the clause. A proposal to arbitrate should be assessed alongside interim protection for sensitive information.

Ordinarily each side pays its own advisers unless the parties agree otherwise. If one party asks for reimbursement, a deposit or a break payment, identify the trigger, calculation, cap, exclusions and relationship with proven loss. Avoid an undefined undertaking to cover “all transaction costs” merely because negotiations fail. Legal diligence, financial diligence, translation and any regulatory filing should be costed early, even if precise fees are not yet known.

A practical timetable uses milestones for data-room opening, diligence questions, first SPA draft, approvals analysis and target signing, with a separate expectation for closing. It names the party responsible for each step. “Completion within 30 days” may be commercially attractive but unworkable where investment screening, merger clearance, consents or seller remediation are required. A long-stop date belongs in the final contractual framework once the conditions are understood.

What are the most common negotiation errors?

What should management send for a first legal review?

A short, organised starter file is enough to identify the first red flags. Use the checklist to track what the team has assembled; it does not transmit information or give an automated legal opinion.

Select each document group as it becomes available. The count updates locally.

• ✓Latest term sheet or offer, including tracked changes and side letters.
• ✓Party, acquisition-vehicle and target identity, legal form and proposed percentage.
• ✓Target articles of association, shareholder list and known transfer restrictions.
• ✓Recent accounts and a short debt, cash and shareholder-loan summary.
• ✓Signed NDA, data-room status and proposed exclusivity deadline.
• ✓Known licences, major contracts, financing consents and regulatory concerns.
• ✓Commercial deadline, financing status and internal approval decision-maker.
• ✓Specific questions on price, structure, conditions and desired negotiation outcome.

What can Atrium’s focused term-sheet review deliver?

A useful first review turns the draft into a decision list: clauses that bind now, issues that require evidence and terms that should stay open until the SPA. The deliverables and fee should be defined for the proposed matter.

Depending on the mandate, Atrium can review the identity and authority of the signatories, mark up the binding and non-binding division, sharpen price assumptions and exclusivity, identify the diligence priorities and flag Romanian corporate or regulatory dependencies. Management can then decide which commercial concessions are acceptable before the document goes back to the other side. This early work can be followed by a separately scoped due diligence exercise and SPA negotiation if the parties proceed.

For a company making repeated acquisitions or running multiple Romanian contracts, ongoing legal support may help maintain a consistent approach to NDAs, board approvals, local filings and recurring commercial documents. A monthly arrangement should state what work is covered and what separate transaction or dispute work needs a distinct mandate. The immediate decision for a single deal remains whether the proposed term sheet should be signed in its current form.

Related Guides

Frequently asked questions

AI Notice: AI-assisted content.