Transactions Blog

In case of business disposals, vendors want to maximise the sales price, while at the same time keeping the sales process as efficient as possible.  Experience has shown, however, that lack of preparation, insufficient regard for business performance during the disposal process and poor process management are among the factors in a divestment process that have a negative influence on value.  This is where a vendor due diligence may come into play.

A vendor due diligence is a thorough due diligence of a business, which aims to address the concerns and issues that may be reasonably relevant to a potential purchaser.  The vendor due diligence report will be provided to each potential purchaser, rather than multiple purchasers undertaking extensive individual due diligence exercises.  A vendor due diligence is therefore suitable in situations where there are likely to be a large number of potential purchasers, typically in an auction process.

The  relevant areas of concern may include amongst others the financial, tax (such as corporate income tax, VAT, social security tax and customs & excises), legal, labor, IT, environment and market/commercial situation of the company.

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A series of new publications have been issued by PricewaterhouseCoopers on the Merger & Acquisition activity of 2008 in the Energy, Utilities and Mining industry.

Renewable Deals

One publication comments on the global renewable power market, its evolution and major deals over 2008. The renewable energy sector is one of increasing importance as a sector, but also for deal making. Energy diversification, technological breakthroughs and climate change regulation will all play a part in driving the growth of the industry.

The report examines the rationale behind the overall trends and the key individual deals, as well as some of the critical issues for companies engaging in deal activity within the sector. The publication also looks ahead at 2009 and sees increasing interest of large industrial companies from outside the sector. Clarification of the true extent of political commitment to clean energy will be a major factor for the market’s evolution, along with technological developments to bring the costs down.

Oil & Gas Deals

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The Act relating to the continuity of enterprises has entered into force on 1st April 2009 (“Loi relative à la continuité des enterprises / Wet betreffende de continuiteit van de ondernemingen” – the “Continuity Act“).

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