Buyers can acquire unintended and potentially very damaging
liabilities together with target business or assets.
Analyzing the financial situation of a target company,
understanding its business model and assessing if the target is the
right fit for acquisition demands experienced advisers.
Unforeseen liabilities, if not properly mitigated, can undermine
the commercial rationale underpinning the deal. Lawyers
advising on the transaction have clear targets: minimize
risks, allocate risks and maximize shareholder value.
Mergers and acquisitions (M&A) transactions are challenging
in a lot of ways. Compliance issues are just one of many
challenges in a transaction. The valuation of the target has
to reflect reputational risks, as well as successor
liability. Additionally, the deal structure and wording of
the transaction document must reflect the compliance risks
associated with the target's business. During due
diligence, a lot of attention goes to financial and
