Taking center stage: The rise and rise of M&A compliance due diligence

28 June 2019

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Mergermarket, in partnership with Baker McKenzie, is proud to present Taking center stage: The rise and rise of M&A compliance due diligence, a new study into dealmaking and compliance risk.
 
Dealmakers in large corporations and financial institutions around the world admit they often significantly under-resource compliance due diligence (CDD) when entering into a deal process. This failure in process can erode or even destroy deal rationale and value a long time after a deal has closed – and two thirds of those surveyed said they had seen at least 25% of the deals they were involved in over the past three years abandoned because compliance issues were identified.
 
In addition to this key finding, the report also shows:
 
  • 55% say that conducting proper CDD increases the chances of success in M&A or JV deal completion
  • More than 50% say they wish they had spent more time on CDD relating to a deal they had already closed
  • Respondents feel that compliance risk is increasing, particularly in terms of anti-corruption enforcement but also into antitrust, export controls/trade sanctions, data protection and environment and labor regulations
  • The understanding of CDD and how best to roll it out varied markedly across the world: in North America, 94% describe their M&A CDD program as effective, compared to 74% in Europe, 42% in Asia (ex Japan) and 37% in Japan