Planning for Mergers & Acquisitions in a Coronavirus hit economy | Corporate

The effects of the Coronavirus (COVID 19) on mergers & acquisitions (M&A) will reach far and wide. Many of our corporate clients will be considering the repercussions and how they can protect themselves when conducting M&A deals that are either on going or planned.

Our corporate team are advising that those seeking to sell actively put in place contingency plans to try and mitigate any negative impact the pandemic may have had on their business. As part of the M&A process, the buyer will be carrying out due diligence into the target company and will be considering the level of risk in areas such as contractual commitments and the impact on revenues. 

Sellers will need to comply with pre-completion conduct of business covenants, such as trading in the ordinary course of business or commitments relating to contracts or employees. In turn, buyers are advised to request warranties around risk assessments and contingency plans.

Furthermore, disclosure letters should be carefully drafted to include coronavirus linked matters to ensure fair disclosure to the buyer. It is also likely that buyers will request specific indemnities for certain known risks.

For further information contact Philip Chapman, Corporate Director, Thursfields Solicitors at pchapman@thursfields.co.uk or call 0121 227 3879.