Buying a US company: legal process, risk control and realistic timelines
Acquiring a US company can accelerate your growth, open premium-pricing potential and secure direct market access. At the same time, the legal process in the United States differs significantly from DACH standards. This article walks you, step by step, through the core legal stages, typical risks and governance tools you should know before signing any US share or asset purchase agreement.
Why buying a US company is attractive – and where the legal risks start
For many DACH industrial “hidden champions”, the US is still the most attractive profit market. In several B2B niches, price levels of 300–400% above DACH benchmarks are possible – if you control legal risk and set up the right structures.
However, US transactions come with specific challenges:
- Different liability culture and litigation risk
- Complex state and federal regulatory landscape
- Stricter compliance expectations, especially in defence-oriented projects
- Time pressure from US sellers and financial investors
The legal process is therefore not just “another share deal”. It is a disciplined risk-control exercise that must protect your German or Swiss parent while securing commercial upside.
Key decision: asset deal vs. share deal in US acquisitions
One of the earliest legal questions when buying a US company is the deal structure. The choice has major implications for liability, tax and integration speed.
How asset deals and share deals differ in US practice
In simplified terms, you can either buy the target’s shares (stock deal) or selected assets and contracts (asset deal). The table below highlights core differences often relevant for DACH buyers.
Comparison: Asset deal vs. share deal when buying a US company
| Aspect | Asset deal | Share deal (stock deal) |
|---|---|---|
| Legal object of purchase | Selected assets, contracts, IP, inventory, etc. | Shares of US corporation or LLC (company as a whole) |
| Liability ringfencing | Better control; many liabilities stay with seller (subject to law and contract) | Historic liabilities typically remain in the company you acquire |
| Complexity of transfer | High; each asset and contract must be transferred/assigned | Lower; ownership changes, business continues in same entity |
| Regulatory approvals | May trigger multiple consents (customers, landlords, licensors) | Often fewer third-party consents, but regulatory review can still apply |
| Tax considerations | Frequently more flexible for buyers (step-up of asset basis possible) | Often more seller-friendly; negotiation needed on purchase price vs. tax effect |
| Speed | Can be slower due to individual transfers | Generally faster to implement after signing |
Choosing the right structure is not a standard pattern. It depends on risk appetite, tax position, regulatory environment (for example in defence-related projects) and the seller’s negotiation stance.
Legal process when buying a US company: from NDA to closing
1. NDA and initial information exchange
Before you see any sensitive information, US sellers will request a non-disclosure agreement (NDA). From your side, you should insist on clear definitions of confidential information, allowed uses and data-room handling, especially when defence-related technology, export control or dual-use items might be involved.
2. Indicative offer and term sheet / LOI
Once you have basic financial and legal information, you typically issue a non-binding indication of interest and then negotiate a term sheet or letter of intent (LOI). This document outlines price corridor, structure (asset vs. share deal), timeline, exclusivity and key conditions to closing. US LOIs frequently contain binding exclusivity and confidentiality clauses – these deserve careful legal review.
3. Legal due diligence in the US context
Due diligence is the core risk-control instrument. A structured US legal due diligence usually covers:
- Corporate structure and governance of the US entity
- Material contracts (customers, suppliers, distributors, government contracts)
- Employment and benefits; unions; misclassification risks
- Litigation, claims and compliance investigations
- Intellectual property and IT/security standards
- Regulatory approvals and export control issues (essential in defence-related cases)
For DACH groups, ringfencing is critical: you want to ensure that legacy liabilities do not “flow back” into the European parent. The findings from due diligence directly shape the purchase agreement, indemnities and price adjustments.
Negotiating the US purchase agreement: risk allocation in detail
4. Warranties, indemnities and caps
US share or asset purchase agreements typically contain extensive representations and warranties by the seller. For a DACH buyer, the negotiation focus is usually on:
- Scope of warranties (completeness, compliance, IP ownership, financial statements)
- Indemnities for specific, identified risks (for example, pending litigation or tax audits)
- Liability caps, baskets and de minimis thresholds
- Survival periods (how long claims can be made)
Compared to many German-style contracts, US agreements can feel more adversarial and detailed. A structured approach keeps the contract comprehensive but navigable.
5. Conditions precedent and regulatory clearances
The agreement will define conditions that must be fulfilled before closing. Typical examples:
- Merger control approvals, where applicable
- Foreign investment or security reviews in sensitive sectors
- Third-party consents (key customers, landlords, licensors)
- Reorganisation steps within the seller’s group
For defence-oriented market entry, compliance with export control, security clearance requirements and “know your customer” (KYC) standards is non-negotiable. The process design can significantly influence time-to-closing and later access to premium pricing segments.
Integration, ringfencing and US premium-pricing potential
6. Post-closing entity and governance setup
After closing, the real work starts. To keep risk under control and realise price uplifts, you should clarify:
- How the US entity is ringfenced legally and financially from the DACH parent
- Which contracts stay in the US company and which are restructured
- Governance: who signs, who controls compliance, how reporting runs
- How distributor or defence-network access is managed to protect IP and margins
A clean entity structure in the US can enable significantly higher prices than in your home market, while limiting exposure of the European group to US litigation risks.
How LANA AP.MA structures US acquisitions for DACH and global clients
LANA AP.MA International Legal Services is a boutique law and economic advisory firm focused on US market entry (including defence-related projects) and global M&A. Headquartered in Frankfurt am Main with offices in Basel and Taipei, we combine European corporate discipline with US and Asia-Pacific experience.
Under the lead of Dr. Stephan Ebner, LANA AP.MA offers:
- Market Entry USA / US Defence – integrated legal and economic advisory, plus access to relevant defence-related networks, structured for compliance and ringfencing.
- Global M&A / Transactions – purchase and sale of larger corporate groups worldwide, often for owner‑managers between 50 and 70.
Our distinctive feature: a Western lawyer licensed in Taiwan, which is rare and particularly useful where US, European and Asian structures intersect. With more than 30 genuine 5‑star online reviews, our work is consistently rated positively; we do not disclose client names for confidentiality reasons.
Service comparison: Market Entry USA vs. full US M&A execution
Comparison: Two typical mandates at LANA AP.MA
| Aspect | Market Entry USA / US Defence | Global M&A / US Company Acquisition |
|---|---|---|
| Primary goal | Fast, compliant market access; ringfenced US presence; defence-network access | Securely buy or sell a US (or global) company group |
| Typical scope | Entity setup, distributor structures, compliance design, pricing logic | End‑to‑end transaction: structuring, due diligence, contracts, closing support |
| Economic angle | Unlock potential 3–4x price levels vs. DACH markets (no guarantee; sector-dependent) | Optimise purchase price vs. risk; avoid hidden liabilities; secure seller alignment |
| Client profile | DACH industrials entering or expanding in the US, including security-sensitive fields | Owners or groups buying/selling mid‑ to large-cap businesses globally |
Next step: clarify your US acquisition risk picture
Buying a US company is neither “too risky” nor a simple standard deal. With the right structure – from NDA and due diligence to ringfenced post-closing governance – you can control liability while accessing attractive premium-pricing potential. LANA AP.MA supports you in aligning legal mechanics with economic outcomes. If you are considering a US acquisition, book a short intro call via lanaapma.com to discuss your goals, risk profile and time horizon on a strictly confidential basis.
