The Importance of Regulatory Due Diligence in M&A Transactions

As the business landscape around the world continues to change and becomes increasingly complex, compliance with regulations is more important than ever. It is imperative to be thorough when pursuing funding, investment or partnerships. This will ensure that your company remains compliant in https://fitboardroom.com/esg-due-diligence-in-investment-planning/ the present and the future.

Regulatory due diligence is a method of evaluating, monitoring and making sure that the company is in compliance with laws and regulations. It covers a variety of issues, such as legal compliance, environmental practices as well as corporate governance, data privacy, and more. It can also be used to identify the capabilities of a company’s target for technological growth and adaptation.

It’s essential for any M&A transaction to have this. According to research by MetricStream the failure rate of deals worldwide varies between 70% and 90% with the complexities of regulatory compliance, geopolitical uncertainty and poorly-planned acquisitions being among the top three reasons. Being vigilant in the regulatory realm can help reduce these risks, increasing the chance of a successful result.

Due diligence on regulatory compliance should be conducted in conjunction with commercial and financial M&A due diligence to minimize the risk. Failure to uncover compliance issues can result in significant fines, losses of profits and a damaged reputation. In extreme situations, it can result in a criminal conviction. It is important to be proactive in the process and use a solution which allows you to perform regulatory screenings and due diligence across multiple jurisdictions. Nexis Diligence+(tm) is a complete business intelligence platform with anti-money laundering (AML) as well as anti-bribery and corruption (ABC) and forensic services to offer an all-in-one source of truth.