From the course: Mergers & Acquisitions
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Renegotiate based on diligence
From the course: Mergers & Acquisitions
Renegotiate based on diligence
- During due diligence you might uncover issues you weren't aware of. Those issues might lead you to renegotiate the purchase price you offered rather than just walking away from the deal. In the vast majority of cases, your initial purchase offer is non-binding. If you find deficiencies with what you're seeking to buy, you have every right to offer the seller less. Since the asset isn't as attractive as you originally thought. The main deficiencies you might find in diligence that you can renegotiate on include things like, their financials, they're not as they originally presented them. They might have lower revenue or higher costs. They may have undisclosed liabilities like loans, claims against their business, lawsuits, or regulatory issues. They may have impaired assets. Their equipment, facilities, or technology may not be in the condition you thought it was. They may have restrictions on the use of their intellectual property, like trademarks and patents. They may have provided…
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