Due diligence and M&A negotiation

When a company is interested in acquiring or investing in another, given the economic magnitude of the operation, it is convenient to conduct a deep research and analysis process to appreciate many aspects that might be unknown and/or hidden.

This due diligence process of research and the gathering of information being carried out by the potential buyer or investor of a company, after initial first negotiations, is key to determine the real risks of the undertaker, and to get a better picture of the target company and its true economic and financial situation.

The purpose of this process is to minimize the risk implicit in a purchase transaction by conducting a detailed and independent analysis of the various business areas of the company.

The due diligence is useful to appreciate possible hidden liabilities in the business, review contingencies that may have occurred, identify synergies that may be developed and plan an adequate strategy and aim to achieve the greatest possible economic benefit after the acquisition.

If after the investigation, new or hidden aspects were found, it might be necessary to return to negotiations to assess the transaction within the new appreciated reality.

Mergers and acquisitions are an instrument of business growth widely used within local and across international boundaries

• The merger is a figure that involves the integration of at least two companies to make way for a third, which is the mixture of both,
• Acquisitions are agreements through which a company acquires partially or in its entirety another company.

At GMAEP we advise and go along with our clients in due diligence and M & A processes, with the highest standards of integrity and confidentiality not exposing our clients, and the results of a successful search process, allowing for the capitalization of greater synergies and value creation.