Geopolitical M&A due diligence
A global industrial company was interested in acquiring a business with substantial presence in Russia. Thorough due diligence had been performed in relation to the potential transaction. However, due to the complexity of the Russian market, the executive management of the prospective buyer requested that the due diligence investigations performed be supplemented by a thorough analysis and assessment from a geopolitical perspective.
Our services included the following components:
- Investigation of the current owner – mapping of political ties, incentives for selling and an analysis on the owner’s personal significance relating to the company's success.
- Analysis of the target company's position in relation to Russian industrial policies and political agenda along with an assessment of the risk of being subject to corrupt practices, direct or indirectly.
- A general geopolitical outlook for Russia connected to how geopolitical changes might impact the company, both in Russia and on the global market. This included analysis surrounding questions such as: How would increasing tensions between Russia and the West impact the target company? and What are the risks of being exposed to current or foreseeable future sanctions?
- Assessment of risk extending to the buyer's operations in other markets stemming from the target company’s activities in Russia.
Our contribution resulted in the following positive outcome for the client;
- Enhanced basis for decision-making connected to the potential acquisition
- Enhanced ability to foresee possible disruptive geopolitical developments
- An overall enhanced contextual understanding of risk connected to an acquisition