In a merger, one firm combines with another and loses ownership, while another dominating corporation obtains higher value and can absorb or merge with another But in an acquisition, the receiving company buys the interests of acquired shareholders and ceases to have an interest.

1. OVERVIEW OF DUE DILIGENCE IN
MERGERS AND ACQUISITIONS
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Presented by:
Navya Chopra

2. BACKGROUND
WHAT ARE MERGERS AND ACQUISTIONS
In a merger, one
firm combines with
another and loses
ownership, while
another dominating
corporation obtains
higher value and
can absorb or merge
with another
But in an
acquisition, the
receiving company
buys the interests
of acquired
shareholders and
ceases to have an
interest.

3. INTRODUCTION
WHAT IS DUE DILIGENCE IN MERGERS AND AQUISTIONS
Due diligence is the process of
thoroughly evaluating commercial
agreements from a variety of
perspectives before making a final
choice.
This is more of an investigation
procedure for evaluating assets and
liabilities, and it also looks into the
potential commercial as well as
economic worth of the Company or firm
where due diligence is necessary.

4. NEED FOR DUE DILIGENCE
Dai-Ichi Sankyo first paid Ranbaxy $4.6 billion
for 63 percent of company stock, but then
wrote down the value of the deal by $3.6
billion. The reason for this is because when
Ranbaxy was directed to shut down all of its
pending and prospective medication
applications from its Ponta Sahib factory in
2009, they were never fully informed of the
scope of the Food and Drug Administration's
(FDA) investigation. The first-to-file
atorvastatin, which had piqued Dai Ichi's
interest, was riddled with issues. Dai-Ichi
ended up losing a lot of money since they
didn't do enough due diligence.
Case Study: Dai-Ichi Sankyo and Ranbaxy
Due diligence is an important part of
M&A deals since it helps purchasers
locate the elements of the firm that they
want to buy.
It aids the consumer in comprehending
the numerous interactions, the
business's growth potential, and its
ability to attract additional clients.
Adequate due diligence also aids the
customer in increasing his possibilities
of making money and minimising his
losses.

5. 1 3
Questionnaire Review
2
Representations
and Warranties
DUE DILIGENCE PROCESS
INFORMATION COLLECTED THROUGH:
INFORMATION ANALYSED
1. 2.
Data Room Approach Submission via Questionnaire

6. Preparation and conduct of the preliminary inquiry
Team Selection
Due Diligence Report
Initial Parameters
1.
2.
3.
4.
Statement or Certificate
5.
DUE DILIGENCE: CHECKLIST

7. IN LEGISLATION
“an investment firm must
conduct proper due
diligence on the target
business before investing. “
Nirma Industries and
Another v. Securities
Exchange Board of India “the Board participation
needs to be carefully
planned and structured when
a major corporate transaction
such as the sale of the
company needs to be made “
Smith v. Van Gorkom
India: SEBI + Companies Act, 2013

8. THE NEED TO DISCUSS THIS TOPIC
PREVENTION IS BETTER THAN CURE.
As the realm of M&A is explored more and more
everyday, it becomes necessary so as to understand
the process of M&A as it provides a way to swifly
expand business.
While understanding the M&A process, it becomes
imperative to understand the importance of due
diligence in it. Due diligence is the investigation
procedure for evaluating assets and liabilities, and it
also looks into the potential commercial as well as
economic worth of the Company or firm where
due diligence is necessary.
The various case study models musr also be
analysed and studied so as to learn exactly what to
do (successes) and what not to do (failures).

9. • Hence, any and all M&A deals require a thorough
due diligence procedure to be successful.
• It is increasingly being required to determine if the
deal's planned value can be realised, whether the
predicted timescale can be met, and whether the
related risks can be efficiently handled.
• It must be meticulously supervised and monitored
in order to maximise the deal's chances of success.
CONCLUSION