M&A expert, Ole Kristian Aabø-Evensen, looks into common legal issues in Norwegian private M&A including best practices for corporate counsel, cross-border legal practitioners and company directors and officers, in the fourth edition of Private M&A.
To successfully complete a transaction during this pandemic, it is necessary to take a look at both the seller and buyer perspective and what they should be focusing on. A seller will normally want to ensure that it has maximum flexibility to take steps that potentially breach pre-completion undertakings under the sale and purchase agreement (SPA) in response to a changing landscape resulting from Covid-19 without the need to ask for, and associated risk of not obtaining, the buyer’s consent. Sellers may also have to consider seeking to amend or delete problematic SPA-warranties or to carve out from their scope (or disclose against) the expected effects of the pandemic on its business.
On the other hand, a buyer will have to focus its legal and commercial due diligence on, inter alia:
understanding the changes in business operations that are necessitated by the pandemic;
to what extent national and international guidance on the safe working of employees has been followed, including if there have been any concerns or complaints about non-compliance;
IT resilience and performance issues resulting from a remote workforce;
suppliers’ capability and capacity to perform and deliver under the pandemic;
to what extent the target’s business is under strain due to customers’ inability to settle outstanding receivables;
to what extent government aid, funding or relief has been applied for or received, and if so, to what extent there are any conditions that are not complied with; and
to what extent the target group’s business operation during the pandemic has been operated in such ways that it exposes the target to an increased tax risk.
Read about this and more in the chapter that covers Norwegian law, practice and regulation in the Lexology Getting The Deal Through’s fourth edition of Private M&A.The full publication including the same key questions and answers for 84 jurisdictions can be found at www.lexology.com/gtdt
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