31 Days to a More Effective Compliance Program - Day 28 | Pre-acquisition due diligence in M&A

Thomas Fox
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A company that does not perform adequate due diligence prior to a merger or acquisition may face both legal and business risks. Perhaps most commonly, inadequate due diligence can allow a course of bribery to continue - with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability. While most compliance practitioners have been long aware of the requirement in the post-acquisition context, the 2012 FCPA Guidance focused many compliance practitioners of the need to engage See more +
A company that does not perform adequate due diligence prior to a merger or acquisition may face both legal and business risks. Perhaps most commonly, inadequate due diligence can allow a course of bribery to continue - with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability. While most compliance practitioners have been long aware of the requirement in the post-acquisition context, the 2012 FCPA Guidance focused many compliance practitioners of the need to engage in robust pre-acquisition due diligence.

Three key takeaways:

1. The results of your pre-acquisition due diligence will inform your post-acquisition integration and remediation going forward.

2. Periodically review your M&A due diligence protocol.

3. If red flags appear in pre-acquisition due diligence, they should be cleared. See less -

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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