Mergers & Acquisitions

M&A transactions as engines of growth
Limiting risks and identifying opportunities

Whether it’s to grow the business, acquire know-how or tap new markets, the goals of mergers and acquisitions (M&A) are many and varied – and the opportunities generally promising. However, it’s not just a case of getting the deal over the line. It’s often only once the transaction has been completed that many challenges emerge. Given the increasing complexity and international dimension of M&A deals, it’s important to have a well thought-out protection package in place before, during and after the transaction in order to prevent conflicts of interest between the parties from the very start.

As a highly reliable risk and insurance partner, SÜDVERS offers both buyers and sellers tailored warranty & indemnity (W&I) insurance solutions and comprehensive due diligence checks.

Challenges in the M&A process: conflicts of interest

Whereas disputes about price tend to dominate before a deal is signed, liability issues are particularly prevalent once the deal has been concluded.

W&I insurance: dealing with unexpected liability risks

A popular and, these days, almost indispensable M&A solution is warranty & indemnity (W&I) insurance. It not only significantly reduces risk, but also narrows the gulf between the various interests in M&A deals and protects the seller’s guarantees offered in the purchase agreement to avert potential financial losses stemming from unexpected liability claims on both sides. It also means that buyers don’t have to set aside a proportion of the purchase price to cover any claims that might arise later on, so they can use the proceeds right away.

Tailored to the individual companies in the M&A process – W&I insurance at a glance:

W&I insurance can essentially be taken out by both parties and can be customised to suit their respective interests.

Due-Diligence Report: making the right strategic decisions

It has almost become an unwritten law: there can be no deal without due-diligence. The due diligence process involves the careful analysis and critical evaluation of the object of purchase. Not only can it uncover hidden risks, it can also identify unexpected opportunities and therefore justify the purchase price or the acquisition itself.

Key Features of Due-Diligencs:

• Clear evaluation of existing insurance policies
• Opinion on the quality of cover and the limits of indemnity (including price level)
• Identification of any unnecessary insurance cover
• Proposals on minimising risks and optimising insurance policies in order to reduce costs where applicable
• Statements on notice periods
• Identification of potential deal breakers
• Executive summary
• Pension provision assessment

Are you a buyer or seller about to complete an M&A deal and want to make sure you have comprehensive cover? Are you interested in a possible deal but feel unsure about the potential opportunities and risks? At SÜDVERS, our experienced M&A experts will be delighted to offer you personal advice and find a solution tailored to your needs