Financial due diligence
In today's highly dynamic and complicated corporate world, performing due diligence on business combinations (technical mergers and acquisitions/amalgamations) is mandatory, not only to ensure that all significant business risks are identified and assessed but also to determine appropriate actions in response to those same risks. As a process duе diligence first arose in the United States of America as early as 1933 with the passage of the Securities Exchange Act. When we acquire a business, we must identify and analyze in detail its strengths and weaknesses, its key issues and the resulting opportunities and risks, including contingent liabilities, legal disputes and any other potential obstacles that could threaten the deal. Similarly, when we decide to sell all or part of our business, we need to be aware of its fair value so that we can ask for a price that, if agreed, will not be to our detriment. While the seller's due diligence checklist is far more modest than the buyer's due diligence checklist, it should at least be performed by the acquiree to determine whether the acquirer has sufficient funds to complete the transaction. During the financial due diligence carried out by our experts, the financial statements of the acquirer and/or acquiring company for the last 5 years are analyzed to establish the financial status of the latter.
