Developing Effective Processes to Manage Risk in M&A Transactions

Abstract

By their very nature, merger and acquisition (M&A) transactions can be unwieldy and complicated. The number of people involved and the different functional areas involved seem to grow exponentially as transaction size increases, and each person or functional area brings a different viewpoint and agenda to the table. The timeline is frequently aggressive and sometimes driven by considerations not within the control of the parties. The opportunities and risks are often sizeable and sometimes involve complicated cross-border elements. To complicate matters even further, the term “M&A” includes a wide variety of transactions, from strategic equity or debt investments or small asset purchases all the way up to multi-billion dollar, acquisitions with worldwide impact. All of these factors create inherent risk in M&A transactions, clearly at a legal level but also at a business level. This article lays out some considerations in the form of a multi-step approach, to help manage this risk.

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