Opinion

Brazil M&A: Auditors at the kitchen table?

A due-diligence downside to working from home.

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Global M&A volumes are down by around 50% from pre-crisis levels – and Brazil is no exception.  As Bruno Fontana, Brazil investment banking and capital markets head at Credit Suisse, tells Euromoney, however, some of those challenges are practical ones.

“There is a specific concern with MAC [Material Adverse Change] clauses, but otherwise terms have agreed upon, governance is agreed upon and we are in the last mile,” he explains. 

“At this point the difficulty has been more on the diligence front. You cannot do due diligence just through a virtual data check. You cannot audit a company without going to a company and looking at the books – physically – and therefore, lawyers cannot issue a legal opinion. 

“However, as the economies begin to re-open, we are starting to get to that part of the transaction.”

The good news is that the armies of lawyers and accountants should soon be able to move around nationally to do these on-site visits. 

The bad news is that if this doesn’t happen soon, it won’t be corporate headquarters they’ll visit.  

Those physical inspections could be to the homes of executives whose companies have ‘evolved’ from the physical constraints of the office.



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