In practice, due diligence is a standard procedure for the examination and evaluation of a target company within the framework of an M&A transaction, but there is no obligation to conduct due diligence. In particular, it serves to gather transaction-relevant information for the company valuation, purchase agreement negotiations and financing considerations of banks and investors, as well as to assess possible risks and opportunities of the business. The legal due diligence usually forms the basis for the contract negotiations, and its results are incorporated into the final purchase agreements via guarantees and indemnity claims, among other things.
The article was published for AnwaltZertifikatOnline, a series of further education courses by juris and DeutscheAnwaltAkademie.
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