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  • Alexey Gorodissky Spoke at the M&A Theory and Practice Conference
29.04.2021

Alexey Gorodissky Spoke at the M&A Theory and Practice Conference

The recent annual M&A Theory and Practice Conference has become a traditional place for discussing urgent M&A issues arising during the times of economic uncertainty. The actual realities convincingly show that both investors and businesses are now more careful when deciding on M&A business restructuring. Representatives of various sectors of economy, who gathered at the conference, discussed how M&A transactions are consummated in the new reality and their legal, sector-specific and economic particularities.

Alexey Gorodissky, head of the AGP Corporate/M&A department, told the conference audience about the legal nuances of preparing for M&A. The key aspect of M&A transactions, of which Alexey told in detail, is the need of a clear picture of how the buyer will take an investment decision and how the negotiation process will go, what is to expected and what is not to be expected from the buyer’s due diligence investigation if the buyer wishes to continue the negotiations, how the complex and/or limited due diligence investigation of the buyer will be carried out, what should be the role of the seller in the process and its responsibility. Alexey shared with the conference audience real AGP practice cases, where the seller’s unpreparedness for a complex due diligence examination by the buyer of a target asset, as well as the seller’s overestimated expectations related to such due diligence resulted in a substantial complication or sometimes procrastination of the deal negotiation process. Alexey also gave an example where the seller’s unawareness of a problem and, consequently, its failure to take steps to solve it in due time led to significant revision of the deadlines for signing and closing of the deal. In his speech, Alexey recommended sellers to conduct their own pre-sale due diligence investigations of target assets, in order to timely detect potential issues and take remediation steps. Apart from that, Alexey explained to the conference audience buyer’s standard approaches regarding representations and warranties provisions, reasons for payment of damages and other terms of a potential deal, and also explained why buyer’s due diligence on the target assets has no effect on such approaches. Alexey also dwelled on the ‘disclosure letter’ concept, explaining why this instrument can help the seller to enter into a transaction on acceptable terms, as well as the reasons why a pre-sale due diligence investigation by the seller (or its advisor) may help the seller to prepare a disclosure letter in a proper and timely fashion.