How it works in a data room
Drafts of the agreement usually circulate in a separate, tightly restricted folder or through the lawyers’ own systems, while the rest of the room supplies the facts the agreement depends on. The warranties are tested against diligence findings, the disclosure process refers back to room contents, and the completion mechanics list documents that must be delivered at closing. Many sellers attach the final room index as evidence of what was made available, and the signed agreement later joins the closing set.
Why it matters in a deal
Because the buyer acquires the company itself, historical liabilities come along unless the agreement allocates them otherwise. That makes diligence more important than in an asset purchase, and it explains why the warranties, indemnities and disclosure letter receive so much attention. The term “share purchase agreement” is common in the UK, Europe and Asia; in the US the equivalent is usually a stock purchase agreement, and many US deals are structured as mergers instead. This is general information only.
Example
An Indian IT services group acquires all shares of a smaller firm in Pune. The SPA includes warranties on tax compliance and employee benefits, a price adjustment based on closing net debt, and a list of completion deliverables. During the final week, lawyers check every deliverable against the room and confirm each is in place before money moves. Our India guide explains local approvals that often affect the timetable.