Competition Law Due Diligence - Checklist
Aim of competition due diligence
Competition law due diligence carried out by a prospective purchaser aims to manage and minimise legal and commercial risk. The exercise has particular implications for the purchase price negotiated, the type/scope of contractual protections and guarantees sought and the degree of risk sharing (if any) the purchaser may be willing to assume in order to get the deal done.
On this basis, a due diligence review will look to flush out and identify:
Checklist | Notes |
|---|---|
Potential substantive issues that may result from a merger of competing or vertically complementary businesses | |
Problems regarding enforcement of (and potential liability stemming from) a target company's key commercial contracts and/or licensing arrangements | |
Any risk in relation to potential or pending investigations resulting from ongoing or past anti-competitive agreements/conduct | |
Any risk in relation to the direct or indirect receipt of state aid or other financial advantages that might need to be repaid, and | |
Exposure to third party damage claims as a result of established or alleged competition law infringements. |
Such considerations will not, however, exist in a vacuum. A prospective purchaser will also need to be conscious of likely seller sensitivities and priorities when organising its due diligence review.