Signing a letter of intent should kick things off properly. Both sides have agreed on the headline terms, the price looks about right, and everything points towards a close. But across European M&A, especially in the CEE region, a lot of deals lose steam right after the LOI goes down on paper. The CEE M&A market hit $6 billion in the first half of 2026, and a big chunk of those deals either stalled or fell apart before completion.
The reasons are rarely about money. They’re about miscommunication, mismatched expectations, poor preparation, and issues that someone should’ve flagged sooner. We’ve broken down the most common post-LOI pitfalls here, from due diligence surprises to earn-out disputes, along with what both sides can do to dodge them.
Due Diligence Turns Up What Should Have Been Disclosed
The most obvious deal-killer is a nasty surprise during due diligence. A buyer signs the LOI expecting clean books and tidy operations, then the data room opens and everything gets murkier. Unresolved tax liabilities, pending litigation, customer concentration nobody mentioned, revenue that hinges on a single contract about to expire.
In CEE markets, this happens more than it should. Sellers sometimes underestimate how deep a buyer’s advisors will dig, so they don’t bother preparing their documentation properly. Other times, the seller knows about the problem but figures it won’t matter once the buyer’s already committed.
It always matters. Buyers who uncover material issues will either reprice the deal, demand indemnities, or walk. The fix is simple: sellers need to run their own pre-sale diligence before going to market. If there are skeletons, it’s better to disclose them upfront and price them in than to have them blow up halfway through.
Misaligned Expectations on Post-Completion Terms
The LOI usually covers the big stuff: purchase price, structure, and a rough timeline. What it often skips over is what happens after completion, and that’s where a lot of deals get stuck.
Earn-out structures are a common flashpoint. A seller might agree to an earn-out in principle but then push back hard on the specific metrics, the measurement period, or how much operational control they’ll actually have during the earn-out window. Management retention causes similar headaches. Buyers often want founders to stay on for 12 to 24 months, but sellers resist the restrictive covenants or compensation terms that come attached.
The best way to prevent this is to cover post-completion terms in the LOI itself, even if it’s just in broad strokes. If earn-out parameters and management lock-ins are at least outlined before diligence begins, both sides will save themselves weeks of back-and-forth later.
How Acquirers Identify Targets in the First Place
Deals don’t start at the LOI. They start long before that, when a buyer spots a company that fits their growth thesis. In the European mid-market, acquirers will spend months tracking potential targets before making an approach, looking for businesses with strong commercial traction and a clean pipeline of revenue.
That’s one reason growth-stage companies invest in their commercial engine early. Businesses that use professional lead generation solutions to build a consistent, trackable sales pipeline tend to look more attractive to acquirers because their revenue growth is documented and repeatable.
Communication Breaks Down Between Signing and Closing
Between LOI and closing, deals need a lot of coordination. Lawyers, accountants, tax advisors, and operational teams on both sides all have to work in sync, and when communication breaks down, things grind to a halt.
The most common version of this is what you’d call the “black hole” effect. The seller signs the LOI, hands over a data room, and then goes quiet. Follow-up questions go unanswered for days or weeks. Momentum dies and trust erodes. Buyers can be just as guilty, requesting exclusivity and then dragging their feet on diligence while the seller’s business suffers from the distraction.
Both sides should agree on communication protocols early on. Weekly update calls, clear points of contact, agreed response times, and a shared tracker for open items will keep things on track.
Keep the Deal Moving or Know When to Walk
Most deals that collapse after the LOI don’t fail because of one big blow-up. They fail because of a slow build-up of friction, missed deadlines, unresolved questions, and small disappointments that chip away at the goodwill built during negotiations.
Sellers who prepare their business for scrutiny and buyers who set clear expectations from day one will close more deals. And the ones that do fall apart will fail faster, which is often the next best outcome.