Subjective pricing evaluations and competition to blame for most M&A disputes, argee panellists

Panellists speaking at this year’s Latin Lawyer-GAR Arbitration summit agreed the subjective nature of evaluating a company’s value and a "buy the company yesterday" culture is why so many M&A deals are ending in arbitration.

Subjective pricing evaluations and competition to blame for most M&A disputes, argee panellists Richard Lorenzo, Paula Forgioni, Anil Shivdasani, Grant Hanessian and Felipe Ossa , photo by Chris Lavado

“Ten, maybe 20 years ago, when a prospective buyer wanted to acquire a company, they would conduct an actual real due diligence process,” said Claro & Cía partner Felipe Ossa. “Those were simpler times because now everybody is in a hurry,” Ossa added, claiming that due diligence has been reduced to “just reviewing a few documents in a virtual data room.” This is because many companies are trying to gain an edge over their competition by using the valuations provided in the reps and warranties documents to rush the due diligence process and will then dispute the value later, he said.

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