An exclusivity period is the agreement by which a seller undertakes not to negotiate or sign with any other potential acquirer for a defined period (typically 4–8 weeks), enabling the preferred buyer to conduct due diligence and finalise SPA negotiations in a secure environment. It is granted after a competitive process selects a preferred candidate, typically against submission of a binding or near-binding offer. Granting exclusivity too early eliminates competitive tension; granting it too late risks losing the preferred bidder. A break-up fee is often attached to protect the buyer from abusive withdrawal by the seller during the exclusivity period.

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Example: after receiving three indicative offers in a Swiss industrial group sale (valued at CHF 35.0 million), the seller grants 6-week exclusivity to the bidder at CHF 38.0 million. During exclusivity, the buyer conducts financial, legal and technical due diligence and finalises the SPA — with a CHF 500,000 break-up fee payable by the seller if it signs with another party during this period.

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At Hectelion, we manage exclusivity timing in sell-side mandates to preserve maximum competitive tension before commitment — one of the most value-sensitive decisions in a sale process.