Mergermarket and Baker McKenzie Report on Global Trends and Practices in Compliance Due Diligence

Dealmakers recognize the negative impact that undetected compliance issues can have on the price, profitability and viability of mergers and acquisitions and joint ventures, especially for cross-border transactions. Compliance efforts are increasing around the world, particularly in light of the Foreign Corrupt Practices Act; the U.K. Bribery Act; and other anti-corruption measures being taken in countries such as China, Germany and Brazil. In this environment, compliance due diligence (CDD) is becoming a higher priority for investors and buyers. According to a recent report, however, dealmakers’ practices are insufficient to address these issues, and many are accepting unnecessarily high transaction risks as a result. The report, which was published by Mergermarket in partnership with Baker McKenzie, reviews and analyzes how CDD is approached around the world and within industries, and identifies trends going forward. This article highlights the Report’s key findings. For coverage of other surveys relating to due diligence, see “How Due Diligence Professionals Approach the Private Fund Review Process” (Jun. 15, 2017); and “IMDDA Offers Fund Managers a Blueprint for Conducting Sexual Harassment Due Diligence” (Aug. 2, 2018).

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