Due diligence is today a standard component of the research that precedes a corporate acquisition and is, indeed, hard to imagine any process of Mergers & Acquisitions (M&A) without this very important element. Over time, companies, banks and institutional investors will have to expand the breath of their due diligence to what is now termed Compliance Due Diligence (CDD).
This has a slightly different object and thus uses a different methodology. Moreover, CDD has a retrospective and prospective nature, extending beyond the legal due diligence. The main objective of CDD is to determine whether the legal and economic risks, which are essential for a company, have been identified, and also, if the company has implemented a compliance management system where information, training and control effectively address these risks. In other words, the law is not the only focal point. The ethical behaviour of management and employees is also important when it comes to safeguarding the reputation of a company — this is a corporate tenet increasingly relevant as it helps preventing, or at least reducing, civil liability risks.
We assist our clients to direct their analyses not only to the typical legal, tax and financial aspects of a due diligence process, but also to consider the different elements mentioned above from a global perspective, contributing to the creation of value in M&A, thus reducing the risk of a bad investment and facilitating a higher degree of integration between the parties to the transaction.