Professional Documents
Culture Documents
A
Group 8
Group Members
Shriprakash Tiwari-169
Sahil Save-140
Aneeket Vare-176
Bindu Singh-157
Sanil Malwankar- 90
Sanyam Khanorkar- 76
Purva Sule-163
Pravin Yeolekar-179
Nilin Kaskar- 73
Omar Jaleel- 64
Vidit Trivedi-170
CONTENTS
Sr.
No.
CONTENTS
1.
INTRODUCTION
2.
3.
4.
5.
6.
7.
8.
CONCLUSION
Introduction
Reasonable steps taken by a person to avoid committing a tort or
offence.
Generally, due diligence refers to the care a reasonable person
should take before entering into an agreement or a transaction
with another party.
Process of evaluating and investigating a prospective business
decision by getting information about the financial, legal,
intellectual and other material information from the other party.
It attempts to reveal all material facts and potential liabilities
relating to the target company/unit/business.
TYPES OF DUE
DILIGENCE
PROCESS OF
DUE DILIGENCE
DUE DILIGENCE IN M&A
Financial/
Accounting
Tax
Legal
Risk
Management
Due
Diligence
Human
Capital
Operational
Technical
COMPLIANCES
IN DUE
DILIGENCE
Insurance
Corporate Compliances
Labour / HR Compliances
IPR
Financial & Taxation
Agreements/ Arrangements
CORPORATE COMPLIANCES
Complete group structure & inter-group transactions
Nature of business
Financials
Statutory Registers & Minutes Books
List of all documents.
LABOUR/HR COMPLIANCES
Business activities, office locations & hours of work
for each of the office.
Labour contract.
Employer supervision
Exemptions
ENVIRONMENTAL
COMPLIANCES
Licenses, permissions, authorizations and consents from
environmental authorities.
Details of any breach of any law, code.
Environmental management committee reports
Hazardous materials, spills, emissions etc. of the Company.
CCI in M & A
All M & A with combined turnover of Rs 4,500 crore or more
will require approval of CCI (Competition Commission of
India) from June 1, with an objective to safeguard interests of
consumers and promote industrial growth.
REASONS FOR
M & A FAILURES
CASE - STUDY
Due Diligence in M&A
Global footprint
Access to new markets
Issues
The US Food and Drug Administration (FDA) announced
an investigation into HIV drugs made by Ranbaxy
Daiichi Sankyo knew about the quality issues spotted by
the FDA, but didn't expect imports of drugs to be barred
September 2008 - a ban was imposed on the imports to
US of 30 of the companys generic drugs due
manufacturing problems at some Ranbaxy plants
In spite of the issues raised by the FDA and a global
financial crisis that was entering its critical phase, Daiichi
Sankyo continued with the transaction
Issues
One more prominent thing that Daiichi probably
missed on was the continuously increasing debt
levels of Ranbaxy.
Daiichi Sankyo did not try to lower the purchase
price- even after news of disaster started to break
around in the middle of 2008 and greatest
financial crisis in history was forcing a brutal
downwards adjustment in asset prices.
2013 Ranbaxy pled guilty to US felony charges
and paid $500 million in fines for manufacturing
substandard drugs and lying about it.
CASE STUDY
Due Diligence in M&A
CONCLUSION
CONCLUSION
Due diligence conducted must be reasonable, but it
need not be perfect.
Due diligence is not just there to identify risks, it can also
identify opportunities to improve effectiveness, cut costs
and fully leverage resources.
Even if an expert can later find fault, the experts ability
to poke holes in the diligence of investigators does not
automatically create liability.
Companies are complex entities operating in a complex
world; no investigation can uncover all the potential risks
of an acquisition.
The point is to make a good faith effort to do so, within
the limits of time and funding, and in consideration of
what matters most the long-term financial health of
the surviving company and its stakeholders.