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Reducing Mergers and Acquisitions risk through due diligence

Mergers and acquisitions require a considerable amount of due diligence by the buyer. The buyer is to make sure about certain things before committing to the transaction, like about what buying it is assuming and what obligations are there, problematic contracts, intellectual property and many more.

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Reducing Mergers and Acquisitions risk through due diligence

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  1. Reducing Mergers and Acquisitions risk through due diligence

  2. Mergers and Acquisitions

  3. The key idea behind mergers andacquisitions is to create a new shareholder value over and above that of the sum of the two separate companies. • In a merger, a negotiation is generally involved between the two companies before the combination takes place whereas in an acquisitions, a negotiation may or may not involved between the two companies.

  4. Mergers and Acquisitions Risks Mergers and Acquisitions require a considerable amount of due diligence by the buyer. For instance: • The buyer is to make sure what buying it is assuming and what obligations are there; • problematic contracts; • intellectual property ; • litigation risks issues; • the nature and extent of the target company’s contingent liabilities .

  5. This is true in case of the acquisitions of private company, where the target company has not considered the survey of the public markets, and where the buyer can able to get the information from the public sources it requires.

  6. Mergers and Acquisitions Laws • Mergers and Acquisitions Laws have been promulgated to control the internal operations of the trade units by many countries. • The Indian Merger andAcquisitions law also allow the amalgamation of any Indian firm with its international equivalent, if and only if the cross-border firm has its set up in India.

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