When you buy or sell a company, the NDA lands first. But wait—it’s not just another NDA. M&A NDAs frame the due diligence process and help protect the seller’s crown jewels, and sometimes the buyer’s. Master these ten differences to control your deal.

1. Mutual vs. Unilateral

Routine NDAs often run one-way: one party discloses for a quote or project. M&A flips this. Go unilateral if only the seller is sharing information. Choose mutual if the buyer will reveal equity details or synergies (e.g., the proposed deal structure includes stock). When in doubt, parties often default to mutual, but this can expose the buyer needlessly to additional risk if the buyer never exchanges information.

2. Scope of Confidential Information

M&A NDAs sweep everything into the definition of Confidential: ops data, deal status, terms, even identities, plus all the regular-NDA confidential information. Sometimes all information exchanged is automatically categorized as Confidential, without requiring it to be labeled. This fuels full due diligence. Standard NDAs are typically narrower, focusing on technical information, like trade secrets (employee NDA) or vendor pricing only (contract bid NDA).

3. Permitted Use

Limit use in M&A NDAs to “evaluating the transaction,” limit means of access (e.g., password protected data room), prohibit reverse engineering, and extend protections to reports and analyses created by the other party based on your Confidential information. Buyers analyze to bid or diligence deeper and create documents in that process—the NDA’s protections should extend to this work product. Routine NDAs on the other hand restrict disclosure of the information, period, or limit it to a narrow purpose, such as submitting a bid.

4. Representatives

Restrict access to a party’s representatives who need access to evaluate the transaction—not everyone at the buyer or seller. These are a party’s lawyers, bankers, investors, advisors, lenders. Require that any person who has access to Confidential information is contractually restricted from disclosing that information. Sellers may want to narrow “financial advisors” or “investors” by listing firms to prevent disclosure to any third party or to competitors. Routine NDAs shouldn’t extend to third parties at all—disclosure should be strictly prohibited.

5. Term and Survival

Tension between buyer and seller can lead to heavy negotiation of the term of an NDA. The disclosing will often demand perpetual protection for trade secrets; recipients seek short term limits for volatile data, like pricing. Term and survival play with return/destruction. Standstills will expire on close. If a transaction never happens, an indefinite term protects against future misuse by the recipient. Routine NDA terms are also negotiated to match the parties’ priorities but are rarely indefinite.

6. Return or Destruction

This is a key protection: if a deal never happens or the NDA terminates, demand the other party delete/destroy everything and certify destruction (with proof if appropriate). This is preferred because most parties add their own confidential information into analyses or reports during the diligence process and don’t want to turn that over (return) to the other party. Negotiate the right to retain copies for legal or regulatory purposes. Routine NDAs do not always have this provision.

7. Artificial Intelligence

AI tools are turbocharging diligence. Consider the risks and rewards of allowing or restricting the use of AI tools to review, summarize, and analyze confidential information. If allowing, reject public (open source, free) tools that retain/train on inputs, auto-grant themselves licenses to data, and breach NDAs through their very use. Greenlight private, secure AI tools that protect confidential information and can adhere to an NDA’s access and return/destruction requirements.  

8. Non-Solicitation

Sellers should identify key vendors, suppliers, customers, and employees to identify threats to the business and determine what type of non-solicitation protections to demand. These can block post-diligence raids on talent, customers, and suppliers. Heavily negotiated, aim for one-two years in duration and keep the terms reasonable to ensure enforceability by the courts.

9. Special Concerns with Competitors and Antitrust

Competitors need to be aware of special considerations to avoid antitrust violations, including “clean teams” to handle sensitive data. International deals often face stricter competition laws than the US. Consult counsel to put safeguards in place before sharing information to avoid civil and criminal liability.

10. Standstill/No-Shop Clauses

M&A NDAs may lock buyers into “standstill” terms: no unsolicited bids, acquisitions, or rival shop talk for 6-12 months. Routine NDAs don’t include this term because there is no deal momentum to protect. Sellers demand it for exclusivity; if buyers agree, they want shorter terms because it keeps them from engaging with the market.

M&A NDAs aren't routine—they need special handling. Partner with experienced M&A counsel from the start to build a strong foundation for your transaction.