Carve-Out Transactions Involving Data: Two Essential Considerations You Need To Make

Carve-out transactions (i.e. the sale or purchase of a subsidiary, a division or other part of a larger business enterprise/group) will often raise a number of important issues for both the seller and the buyer when it comes to the split and transfer of the business data involved. Understanding these issues, and taking the right actions, is becoming increasingly important in M&A transactions and traditional approaches to M&A will often not provide sufficient protection.

In carve-out transactions, data is often shared, bundled or otherwise located "outside" the carved-out business.

Illustration 1: Example of transaction structure

Illustration 2: Detailed transaction perimeter where the data pertaining to the Target Group is in fact located in the Seller Group, and vice versa