The Importance of Regulatory Due Diligence in M&A Transactions

As the global business landscape continues to change and become increasingly complex, compliance with regulations is more important than ever. It is important to do your due diligence thoroughly when you are seeking investment, financing or partnerships. This will ensure that your company remains in compliance today as well as the future.

Regulatory due diligence is the process of the process of analyzing and monitoring an client, partner or investor’s background to ensure compliance with the laws and regulations. It covers a wide range of subjects, such as corporate governance, legal compliance, data security, and more. It can be used to determine the capability of a target to undergo technological advancement and growth.

It’s essential for any M&A deal to have this. According to research by MetricStream the failure rate of deals worldwide varies between 70% and 90% with issues with regulatory regulations, geopolitical uncertainty and ill-advised acquisitions being among the top three reasons. Due diligence in the regulatory realm can help reduce these risks, thereby increasing chance of a successful result.

To reduce risk To reduce risks, regulatory due diligence must be conducted simultaneously with financial and commercial due diligence. Failure to identify compliance issues can lead to substantial fines and loss of profits, and a damaged reputation. In extreme cases, it may result in to a criminal conviction. The key is to be proactive in the process, leveraging the power of a system that allows you to conduct regulatory due diligence and other screenings across multiple jurisdictions in a seamless manner. Nexis Diligence+(tm) integrates a complete business intelligence platform with anti-money laundering (AML) and anti-bribery corruption (ABC) and forensic services to offer one source of information.

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