Article / 3 Jul 2025

Signed but not sealed: the waiting game between signing and completion

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Gateley Middle East

Signing a sale and purchase agreement (SPA) isn’t the finish line – it’s just half the race. In the Middle East, it is common to have a gap between signing the main transaction documents and the actual transfer of ownership (commonly referred to as ‘completion’). This period can be a source of uncertainty and risk for both buyers and sellers and requires careful management. For sellers, it is crucial because it directly impacts when they receive their proceeds.

Hear more from legal director, Amun Bashir:

What causes the delay? 

Regional nuances

Government departments in the Middle East (like an Economic Department or Free Zone Authorities) are required to approve share transfers which have timing implications. They will often require documents to be submitted to them or signed in their presence which they will subsequently review and process prior to granting approval. This process can take days or weeks, depending on the authority. This contrasts with the position in many other jurisdictions outside of the region where a share transfer can often be agreed privately between a buyer and seller, without the need to seek any third-party approval. 

Conditions precedent

Buyers often require certain conditions to be satisfied by a certain ‘long-stop date’ before they are willing to finalise the deal. These conditions can include:

  • Regulatory approvals: Obtaining mandatory approvals from a competition authority or industry-specific regulators. On 31 March 2025, the UAE implemented new merger control thresholds, bringing significant changes to its competition law framework. Businesses must therefore assess whether their transactions meet the revised thresholds and ensure compliance to avoid delays, fines or regulatory intervention. The 90+ day review period means businesses will need to integrate merger control assessments earlier in their deal timelines.
  • Third-party consents: Obtaining consents required under the target company’s contractual agreements due to the operation of change-of-control clauses.
  • Restructuring or debt settlement: Requiring a corporate restructuring prior to completion or settling outstanding debt.

It is not uncommon for this period to stretch 30, 60 or even over 90 days if, for example, competition clearance is required. 

The seller’s perspective: risks and mitigation strategies

The gap between signing and completion creates several risks for sellers:

  • Deal uncertainty: There is always a chance the deal might not complete if the conditions precedent cannot be satisfied or if a ‘long-stop date’ is missed, allowing the buyer to terminate the SPA. The buyer may also have the right to terminate the SPA if a material change arises during the gap period which has a material financial impact on the target business.
  • Loss of control: During this period, buyers typically require the sellers to operate the business in the usual manner, but with limitations that require the buyer’s consent for numerous operational matters. Buyers may also request access to the business, including attending board meetings, which could potentially impact day-to-day operations, customer relationships and employee morale.

Here’s how to stay in control and close strong:

  • Achievable conditions: When agreeing to the conditions precedent, sellers must ensure that these are achievable, measurable and have realistic timeframes for completion. Any material adverse change clauses should be objective and linked to specific metrics.
  • Reasonable gap controls: Gap controls should provide sufficient freedom for the sellers to run the business as they typically would without having to obtain approvals from the buyer.
  • Warranty compliance: Sellers should carefully monitor the target business’s operations to ensure continued compliance with the warranties. If a breach arises, the seller may have the right to disclose against that breach, which may prevent claims or termination.
  • Control the narrative: Plan internal communication carefully to avoid uncertainty or tension within the team.
  • Secure proceeds with an escrow arrangement: A primary concern for sellers is ensuring that they receive payment at completion. If there is a concern around a buyer’s financial stability, sellers can insist on an escrow arrangement. In this setup, the buyer deposits the funds with a third-party escrow agent (usually a bank) after signing the SPA but before ownership of the target transfers. The escrow agent can only release the funds to the seller upon evidence of the completed share transfer or return them to the buyer if the SPA is terminated.

Final word

As a seller, how you manage the gap between signing and closing can make or break your transaction. Negotiating achievable conditions and key seller protections in the SPA is therefore crucial to ensure that the deal is not just signed – it is sealed and delivered.

Get in touch

To discuss any of the issues raised in our series, please get in touch with a member of the Gateley Middle East corporate team.

Sell-smart series

Read all insight in our sell-smart series, a series to guide you through the key aspects of a business sale.