Do you know that a company cannot hold back their employees in TSA without signing a CONTRACT!! Stated in US labor law.
In some instances, a buyer may not be in a position to have benefit plans to cover newly acquired employees at closing. Thus, there may be a desire on the buyer's part to have the buyer's newly acquired employees remain on the seller's benefit plans and payroll for some period after closing in order to set up appropriate buyer. In the US, this is often achieved through the use of a transition services agreement (TSA). However, TSAs may be problematic.
In some countries (e.g., Singapore and Canada), TSAs maybe permissible with some basic requirements. However, in other countries (e.g., France), such arrangements are generally prohibited or the status of such arrangements are unclear (e.g. India). In some countries, the seller may need to obtain a specific license in order to perform the transition services. Even where TSA type arrangements may be permitted, there may be situations where post-closing continuation in the seller's plans just isn't practical (e.g., in some cases continued participation may require the consent of a regulator or other third party which could delay closing), or would require the seller to amend its plans to permit continued participation (which a seller is not likely to want to do).
When the business teams are negotiating the broad terms of the deal, promises about transition services are often made without knowledge of what can and cannot be provided. Often those issues do not come to light until after the deal is signed and the parties are moving to closing. That may result in delayed closings in some countries, which can carry additional costs for the parties