Mergers & Acquisitions

Risks that often go overlooked when acquiring or merging with another company are risks involved with the assets that are acquired and the liabilities that are attached. Whether or not a company is aware of certain assets that they are acquiring, they are still liable for any legal, environmental, social, and other wrongdoings. For example, in 2016, General Electric was sued for $1 billion after it was found to be the owner of a property that was used for a superfund site (General Electric had no knowledge of the property’s use). Despite being unaware of pollution, ExxonMobil was sued for $500 million in 2017 as the owner of a property that was contaminated with oil and gas dumping. Another example involves suing Walmart for $250 million after Walmart was found to be the owner of a property that was used for a landfill.

Companies certainly take several precautions to mitigate many of these risks, such as comprehensive integration plans and financial analyses; however, as illustrated in the examples above, even the largest companies with ample resources sometimes overlook the importance of conducting due diligence in the assets they have acquired. Many times assets are unknowingly acquired through a series of acquisitions, thus even the company being acquired was not aware of some of the assets they were passing on.

Claim Exchange works with Mergers & Acquisitions departments to conduct meticulous discovery of all assets involved in past and present transactions. Our discovery process is not limited to the company they are acquiring, but also providing title chain research on all unknown and remnant assets to mitigate unforeseen potential catastrophes such as the ones in the example above.