Legal Due Diligence in International M&A
By TIMOTHY A. MACKEY, MICHAEL L. SPAFFORD & BUB WINDLE
In today’s global environment, legal due diligence is not simply a procedural hurdle. It is a key component of any international M&A deal. Enforcement efforts by regulators worldwide and the political demands for corporate accountability are at an all-time high and must be considered in corporate acquisitions or restructurings. M&A deals can create, or transfer to the successor company, not only liability for violations by the target company, but also the concomitant costs—both reputational and pecuniary—of any subsequent investigation and enforcement action. This means that a target company’s true value cannot be determined without considering all the relevant legal issues, and it makes legal due diligence an essential step in any cross-border M&A deal.
U.S. anti-bribery and antitrust laws present particularly important issues given their international reach, the specter of successor liability and U.S. regulators’ active role in cross-border enforcement. Non-U.S. companies, whether incorporated in Asia, Europe or elsewhere, must be aware of the issues these laws present and tailor their legal due diligence protocols appropriately to assess the risks.
Reproduced with permission from Corporate Accountability Report, 13 CARE 01, 01/02/2015. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033)