What is Closing?

Definition

Closing is the stage of an M&A transaction at which legal ownership of the business is transferred from the seller to the buyer and the transaction is completed. At closing, the agreed purchase price is paid, ownership documents are executed and all conditions required under the transaction agreements have been satisfied or waived.

Depending on the transaction, signing and closing may occur simultaneously or be separated by several weeks or months if regulatory approvals or other conditions precedent must first be fulfilled.

Why it matters

Closing marks the legal completion of a transaction and the transfer of ownership, risk and economic benefits to the buyer.

In practice

Cross-border transactions or acquisitions requiring regulatory approval often involve a significant period between signing and closing, during which both parties continue to prepare for integration.