The most common risks in M&A transactions include hidden liabilities, regulatory and legal risks, contractual disputes, and overvaluation of the target company. These risks can be effectively mitigated through comprehensive due diligence and the inclusion of appropriate protective clauses in transaction documents.
Among the most frequent transaction risks are:
- undisclosed tax or financial liabilities,
- regulatory and legislative compliance risks,
- disputes with contractors or unclear ownership of assets,
- overvalued or undervalued company valuation.
How to reduce risks in the M&A process
Risk mitigation involves:
- conducting a thorough due diligence review,
- including protective clauses (such as representations, warranties, and indemnities) in the share purchase agreement,
- engaging experienced legal and financial advisors to safeguard the parties’ interests.
Professional legal advisory not only helps identify and minimize risks but also enhances the security and efficiency of the entire transaction process.
If you are planning a business sale, investor round, or acquisition, contact our M&A Team – we’ll help you identify and mitigate risks at every stage of the transaction.