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.