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Environmental Risks in Mergers & Acquisitions

Mergers and acquisitions (M&A) are a creative dynamic that drive growth and efficiency within an ever-changing global business world. Environmental risks, however, often present hurdles to achieving successful transactions and realizing post-transactional performance and financial goals.

Environmental due diligence can provide insight to M&A deal participants in understanding and quantifying their potential environmental liabilities. The costs and uncertainties associated with these risks are typically factored into the transaction in the form of “go-no-go” decisions, purchase price adjustments, and contractual indemnity obligations.

However, experience has shown that the costs associated with environmental risks often exceed those forecasted at the time of the transaction. Known and unknown pollution conditions can develop adversely. If not properly assessed and managed, they can negatively affect several important elements of a transaction for buyers and sellers, including deal pricing, terms, and post-transaction financial performance.

Marsh’s Environmental Practice can help businesses and their M&A advisors better understand the environmental risks associated with specific transactions, advise on a wide range of solutions to help mitigate risks, and secure robust risk transfer solutions to protect against adverse risk development and help deliver superior transaction outcomes.

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James Vetter

James Vetter

Managing Director, Environmental Practice

  • United States