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M&A and risk and compliance teams

On Behalf of | Mar 23, 2022 | Business & Commercial

While starting a business is a major step for entrepreneurs in Maryland and elsewhere, the same is true for established businesses when they expand by acquiring another business or sell their business to another company to acquire. As such, mergers and acquisitions or M&A continually occur in the business world on a national and worldwide scale. While there is much positivity surrounding these business activities, they also come with risks.

Increase in M&A

The past year experienced a volume set record of M&A at $5.9 trillion. This is a 28% increase from the prior record year in 2007. Because the activity surrounding M&A indicates that there is no likelihood of them slowing down anytime soon, it is important that the dealmakers involved also include risk and compliance teams at the table.

Risk and compliance teams

Not only is value added to the process, but safety and protection is provided when risk and compliance teams are part of the M&A from the very start. When two companies merge, so do their risks. By having this team involved, a full and clear picture can be made of these risks and what steps can be taken now and, in the future, to better them.

When risks are uncovered, this can add to the negotiations. A buyer may be able to use this when working out the logistics of the deal, such as the deal size, scope and speed. Due diligence is necessary when working through a M&A, and by including a risk and compliance team at the table, this allows the deal to keep on pace while risks are explored. Through due diligence, a acquisition target can be thoroughly vetted.

Business law can be quite complex. Even a well, long-established business could encounter issues regarding a business deal or contact. As such, it is important that options are understood. This helps the company not only protect their business and their interests, but it also ensures that the business matter will not disrupt the business as a whole.