M&A – hidden costs

In this environment, say Alex Rene and Jehan-Philippe Wood of Fulbright & Jaworski International, UK-based businesses have never been under greater pressure to combat fraud, bribery and corruption. They face these risks in many different contexts, but one often overlooked area is mergers and acquisitions. Corporate transactions give rise to particular risks, because they can expose otherwise honest companies to a significant risk of damage from previous corrupt activity. This article considers some of the obstacles that companies can face in attempting to deal with bribery and corruption risks during a merger or acquisition and a practical response.

Alex Rene (+44 (0) 20 7832 3663, arene@fulbright.com) is a partner at Fulbright & Jaworski International LLP and a former assistant United States attorney and trial attorney in the Department of Justice’s Criminal Division, Fraud Section; Jehan-Philippe Wood (+44 (0)207 832 3629, jpwood@fulbright.com) is a Senior Associate the Global Disputes Practice at Fulbright & Jaworski International LLP.

Current trends

The current global recession means that businesses are struggling. For many, this is not a time to get out the cheque book and start buying up other businesses. That said, there are undoubtedly some who can take advantage of short term opportunities presented by recent share price falls and cheapening asset values. In addition, in the longer term, there is the prospect of industry-wide consolidation.