Privacy-Related Representations In M&A Agreements

Companies regularly store information about their customers, clients, employees, investors, partners and vendors. Privacy and data security are therefore important aspects of most m&a transactions. Although the risk of non-compliance with privacy laws may result in severe negative consequences, many m&a agreements still lack adequate privacy-related representations and warranties (R&W). This article discusses the rising importance of privacy issues and how to approach them effectively.

Know who you are and what you acquire

In order to frame an appropriate set of R&W, it is of vital importance for both parties to not only understand the target's business in general but also the privacy-related environment in which the target conducts its business (eg nature and amount of collected personal information, storage location and applicable privacy-related legal provisions). By properly assessing privacy and data security issues in the course of a due diligence, a