Company Acquisition and Sale in Spain: Process, Contract and Legal Keys [2026]

A company acquisition or sale is the legal transaction whereby ownership and control of a business is transferred from a seller to a buyer. In the Spanish M&A market, transactions are predominantly structured as share purchases or acquisitions (share deals), although in certain circumstances asset purchases (asset deals) are preferred.

"Each company acquisition transaction is unique. No two SPAs are identical because no two companies are identical. However, there is a structure and clauses that are repeated in all professional transactions. Knowing and understanding these is what makes the difference between closing a good deal and assuming unnecessary risks."

— Samuel Navarro, founder of Capittal Transacciones

85%

Percentage of mid-market transactions in Spain that are structured as share deals (share purchases), according to analysis by Capittal Transacciones on its track record and TTR Data 2024 market data.

Share deal vs. asset deal: how the transaction is structured

The first strategic decision in a company acquisition is whether to buy the shares/equity of the company (share deal) or the business assets (asset deal):

General rule: In the Spanish mid-market, the share deal is the default structure unless there are specific reasons for an asset deal (significant contingent liabilities, interest only in one business line, complex corporate structure).

The purchase agreement (SPA): essential clauses

The Share Purchase Agreement (SPA) is the central contract of the transaction. In the Spanish mid-market, a typical SPA has between 30 and 80 pages plus annexes. Its main clauses are:

1. Price and adjustment mechanism

The price can be fixed (locked box) or variable (completion accounts):

• Locked box: Fixed price calculated on accounts at a date prior to completion. The seller assumes there will be no value leakage (no leakage). It is faster and simpler, preferred by sellers.
• Completion accounts: Provisional price that is adjusted after completion according to accounts at completion date. More protective for the buyer, but generates uncertainty about the final price.

55%

Percentage of mid-market transactions in Europe that use the locked box mechanism, an increasing trend compared to completion accounts, according to CMS European M&A Study 2024.

2. Representations and warranties (Reps & Warranties)

These are seller declarations about the state of the company in multiple areas: annual accounts, tax situation, employment, contractual, intellectual property, regulatory compliance, litigation, environmental, etc. If any representation proves to be false or inaccurate, the seller must indemnify the buyer.

3. Indemnification and limitations

The indemnification regime establishes the seller's liability limits:

• Cap (maximum limit): Typically 15-30% of price for general reps, 100% for fundamental reps (title of ownership, legal capacity).
• Basket (accumulated minimum): The buyer can only claim if damages exceed a threshold (typically 0.5-1% of price). Can be de minimis (individual) and basket (accumulated).
• Claim period: 18-24 months for general reps, 4-5 years for tax and employment reps, no limit for fundamental reps.

4. Conditions precedent

Conditions that must be fulfilled between signing and completion: regulatory authorisations (competition), third-party consents, shareholder waivers, delivery of documentation. If not fulfilled, the transaction does not complete.

5. Typical complementary clauses

• Non-compete: The seller commits not to compete for 2-3 years, within a defined geographical and sectoral scope.
• Non-solicitation: The seller cannot recruit employees or clients from the sold company.
• Earn-out: Variable payment linked to future results (see our detailed article on what is an earn-out in M&A).
• Escrow: Deposit of part of the price (typically 10-15%) in an account controlled by a neutral agent, as guarantee for indemnifications.

The letter of intent (LOI / Term Sheet)

Before the SPA, parties usually sign a letter of intent (Letter of Intent, LOI) or a term sheet that sets out the main terms of the transaction. This document is usually non-binding regarding price, but binding regarding confidentiality (NDA) and exclusivity.

Typical LOI content:

• Indicative price and structure (cash, earn-out, participation in new company)
• Transaction perimeter (what is bought and what is excluded)
• Main conditions (due diligence, financing, authorisations)
• Estimated timeline
• Exclusivity (typically 60-120 days)
• Confidentiality

The role of the M&A adviser in the acquisition

The M&A adviser acts as the transaction's conductor, coordinating lawyers, auditors, tax advisers and ensuring the process advances according to schedule. Their main functions:

• Vendor side (seller's adviser): Preparation of the company for sale, valuation, identification of buyers, management of competitive process, negotiation of price and conditions, coordination of completion.
• Buy side (buyer's adviser): Target search, preliminary analysis, valuation based on EBITDA and other multiples, coordination of due diligence, SPA negotiation, financing structuring.

Frequently asked questions about company acquisitions

What is an SPA (Share Purchase Agreement)?

The SPA is the share purchase contract whereby the transfer of ownership of a company is formalised. It is the central legal document of any M&A transaction. It includes the price, seller representations and warranties, indemnification regime, completion conditions and ancillary clauses (non-compete, earn-out, escrow). In the Spanish mid-market, SPA negotiation typically takes between 4 and 8 weeks.

What is the difference between share deal and asset deal?

In a share deal the company shares or equity are purchased, whereby the buyer acquires the complete company (with all its assets, liabilities, contracts and employees). In an asset deal, the buyer selects the assets it wants to acquire (and eventually the liabilities it wants to assume), leaving out the rest. The share deal is the standard structure in 85% of mid-market transactions in Spain.

How long does a company acquisition transaction take?

The complete process, from first contact to completion, typically takes 6-12 months. The phases are: preparation (1-2 months), contact with buyers (1-2 months), indicative offers (1 month), management presentations and finalist selection (1 month), due diligence (2-3 months), SPA negotiation and completion (1-2 months). Factors such as regulatory authorisations, complex financing or earn-outs can extend the process.

Do I need a lawyer to buy or sell a company?

Yes, it is absolutely essential. Company acquisition involves complex legal issues in commercial, tax, employment, contractual and regulatory matters. Both buyer and seller need lawyers specialised in M&A to review and negotiate the SPA, in addition to an M&A adviser to coordinate the entire process. Typical legal costs in a mid-market transaction range between €30,000 and €100,000 per party.

Sources and references

• TTR Data. Annual M&A Report in Spain, 2024.
• CMS. European M&A Study 2024 (price mechanisms, liability limitations).
• Royal Legislative Decree 1/2010, Companies Act, arts. 106-112.
• Law 3/2009, on structural modifications of commercial companies.
• Civil Code, arts. 1445-1537 (sale and purchase).
• Workers' Statute, art. 44 (employment transfer).

Do you need advice on a company acquisition?

At Capittal Transacciones we advise both buyers and sellers in mid-market transactions.

Contact our team

Last updated: March 2026