COVID-19 - Issues To Consider In M&A Transactions

Due diligence

One of the most immediate impacts of COVID-19 will be on the potential increased scope of the due diligence process. The following are likely to be important considerations for buyers and sellers:

• the extent to which the target is affected by restrictions on commerce;
• contractual termination provisions and ongoing negotiations between the target and counterparties;
• exposures, safeguards, mitigation and contingency plans relating to COVID-19;
• solvency risk and impact on revenues;
• potential changes to the legal and regulatory landscape;
• extent of coverage under the target's insurance policies; and
• restrictions on the target's ability to access and provide due diligence information, permit on-site inspections and facilitate operational due diligence.