Why does a deal take so long to close?Easy

Because between the handshake and the money there are approvals nobody in the room controls — and the timetable is theirs, not the parties'.

2 min read · 404 words

Two companies agree terms in a week and then nothing happens for nine months. The gap is not slowness; it is a list of conditions, each with its own timetable and its own decision-maker.

Competition clearance

Most sizeable transactions must be notified to competition authorities and cannot complete until they clear. Several jurisdictions may be involved, each with its own thresholds and its own clock, and a first-phase review can escalate into a much longer second phase.

The authority is not a party to the deal and has no interest in the timetable. This is the condition that most often decides how long the whole thing takes.

Foreign investment screening

A newer layer and a growing one. Governments review acquisitions in sectors they treat as sensitive — infrastructure, defence, technology, health, sometimes food. It is a political decision with a legal process, and it added a second unavoidable approval to deals that previously had one.

The shareholder vote

If a target's holders must approve, they need a document. That document is usually reviewed by a regulator, it has statutory notice periods, and the meeting can only be held after them. Weeks, reliably, and more if a regulator has comments.

The financing

Committed funding has to be drawn, and where the purchase is leveraged the loans and bonds have to be syndicated or sold. That is its own process with its own market windows.

Everything else that stacks up

• Sector regulators — banking, insurance, telecoms, gambling — each with a fitness assessment of the new owner.
• Works council or employee consultation, which in several European countries is a legal requirement with a minimum period.
• Third-party consents: landlords, customers and lenders whose contracts contain a change-of-control clause.

The long stop date is the real deadline

The agreement names a date after which either side may walk away. Everything above has to be done by then. If it is not, the parties either extend — which is a renegotiation in which the side that needs it has said so publicly — or the deal ends and a break fee may be payable.

What the waiting looks like from outside

The target's shares trade a little below the offer price for the whole period. That gap is the market's running estimate of whether all of this will be completed, and it moves on regulatory filings rather than on business news. The recommended offer sets out the full sequence.