Globalization, increasing political, regulatory harmonization and monetary union in Europe have resulted in a dramatic increase in cross border and local transactions. While each transaction is different, there is a common driving force – the desire to realize significant business benefits and increase shareholder value – particularly in the current business environment. To achieve this, tax and legal issues need to be considered at every step of the deal cycle.
Companies with global ambitions cannot afford to ignore the opportunities for profitable growth offered by mergers, acquisitions and disposals. But if these transactions are to create real value, it is important that the tax and legal implications of each deal are dealt with from the outset. This is especially important in cross-border deals, where differing regulations and business cultures need to be reconciled in order to reveal the risks and opportunities of a transaction.
In a highly professional and competitive deal environment, many transactions are organized as structured auctions. Only the strongest bidder will win. When strategic investors compete with private equity for the few attractive targets offered, understanding how a deal is done becomes crucially significant.
To assess the real value of a transaction you need to understand the historical tax and legal risks associated with an enterprise for sale. To win an auction, you also need to evaluate and quantify upside potential. In many cases, tax and legal can make a difference.
In a crisis environment, less means are available to finance in-depth en broad ranged due diligences. In such an environment, the transaction parties need more than ever highly experienced tax & legal advisers to assess key issues in an efficient way and, subsequently, to pay particular attention to the deal structuring and the drafting of the contractual documents involved.