Mergers & Acquisitions (M&A) in the UK: Legal Risks and Due Diligence

Key Legal Challenges in M&A Transactions

Due Diligence Requirements

• Acquirers must conduct extensive legal, financial, and operational due diligence to identify risks.

• Intellectual property (IP), contracts, and tax liabilities must be thoroughly reviewed.

Competition Law & CMA Oversight

• Transactions that reduce market competition may be investigated or blocked by the CMA.

• Foreign investments in UK businesses are now subject to stricter review under the National Security and Investment Act 2021 (NSIA 2021).

Shareholder Agreements & Dispute Prevention

• Clearly defined shareholder rights, voting structures, and exit mechanisms are essential.

• Earn-out agreements can mitigate risks in staged acquisitions.

Strategic Considerations for M&A Success

• Structuring deals to minimize tax exposure, particularly in cross-border transactions.

• Using English law frameworks, which offer strong contractual protections for investors.

• Negotiating warranties and indemnities to protect buyers against unforeseen post-acquisition liabilities.

Successful M&A transactions in the UK require robust due diligence, regulatory compliance, and strategic structuring to mitigate financial and legal risks.