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What is a Deal Date?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 25 November 2016
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    2003-2016
    Conjecture Corporation
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Deal dates are dates when a business transaction is agreed upon and begins to move toward completion. Depending on the circumstances, the deal date and the completion date for the transaction may be the same. However, there is usually a short period of time between the decision to enter into the transaction and the actual completion.

The events leading up to a deal date vary slightly from one transaction to another. However, there is a general pattern that prevails. First, one entity will approach a second entity about entering into a merger or a purchase of some type. If the second entity is open to the idea of the transaction, dialogue will ensue. At the point that the communication between the two parties establishes that interest has reached, the deal date is reached and the final stages of completing the deal can begin.

A deal date is usually the last stop before the purchase of a business takes place. At this juncture, the only tasks that usually remain are to prepare the documents necessary to complete the sale, have legal counsel for both the buyer and the seller review the documents, and finally sign and execute the necessary paperwork. While the two parties have agreed to the transaction as of the deal date, it is only when assets have changed ownership that the deal is considered to be complete.

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Still, a deal date is an important landmark in the process of any transaction. It is at this juncture that all parties involved in the proposed merger or acquisition have determined that they want to see the transaction take place and begin to take the necessary steps to complete it. However, the deal date does not have any real legal standing. The deal is considered legal and binding only after all parties have agreed to the terms of the sale and signed the documents transferring ownership.

Along with mergers and acquisitions, a deal date is also applicable to short term arrangements between individuals or businesses. For example, entrepreneurs who choose to enter into a joint venture partnership usually begin their talks with assessing the interest level of each partner and only move forward with formalizing the partnership after a deal date is reached. Whether the transaction is a short term or long term arrangement, a deal date always paves the way for the final settlement of the details.

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