Question

name two ways in which due diligence shall protects the benefit of the bargain in an M&A process?

Answer 1

Due diligence refers to the process of investigation or audit of a deal or investment opportunity which helps a buyer with an assurance of what they are buying.

Due diligence helps the buyers in getting a sniff of the actual business aspects they are interested in purchasing.It is the due diligence process that helps the buyer in understanding the different synergies,growth potential of a business.By gathering this information,the buyer is better equipped to make an informed decision and close the deal with sense of certainity.

Due diligence helps the firm in adjusting themselves according to the expectations of the target firm.Due diligence helps in building a good rapport between buyer and the target company.