Merger and Acquisition Due Diligence

Merger and Acquisition Financial Crime Due Diligence

Merger and Acquisition (M&A) activity within the financial services sector carries intrinsic financial crime risks by virtue of the characteristics inherent in a M&A transaction. When one FI purchases another, or customers are transferred from one to another, the buy-side or merged entity becomes liable for the financial crime obligations of the total customer book. 

As part of a M&A transaction, confidence that each party has met its financial crime obligations and that the transferred assets are in a condition to withstand regulatory scrutiny is vital to ensure transaction success. Failing to ensure both parties are in a regulatory accepted condition can have an immediate and drastic impact on business operations, perceptions of executive competency and shareholder sentiment.

M&A financial crime due diligence can take several forms, with the desired approach dependent on any number of factors, such as:

Whether the counterparty is a similar business to yours with matching risk appetite and key operational factors

Whether the transaction is structured as an asset purchase or a share purchase

Where the counterparty has a history of financial crime failings, enforcement or liabilities outstanding

Where the counterparty has a history of financial crime failings, enforcement or liabilities outstanding

Where the transaction includes an expansion into a new market, client segment or product offering

Engagement with regulators and their requirements to approve the transaction

How CW Compliance can help with your M&A transaction

We undertake independent assurance of financial crime compliance for the subject firm or asset transfer base

Our Project Management experts assess and deliver a client impact strategy for High Net Worth (HNW) and Ultra-High Net Worth (UHNW) client transfers

We review and perform gap analysis of the target firm’s financial crime framework against the acquirer to identify any issues and undertake uplift activities

Our team engage with regulators to detail issues, actions and agree a corrective plan

We perform targeted business line reviews or triaging of client portfolio to identify those outside of appetite

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