The Practice Study Of Due Diligence In Merger And Acquisition

Merger and acquisition (M&A) is an important way for company to optimize and improve its industrial structure and organization, and also an effective mean to increase Scale merit and international competitiveness. As the economic system restructuring goes deeply and global economy integrate fast, M&A is becoming one of the major means for stimulating the economy growth. Moreover, M&A also plays an important role in country macroeconomic shifting, especially in transformation of state-owned enterprises.However, M&A is also a double-edge sword, though it realizes the enterprises combination and capital circulation, there are still lots of law risks in M&A. Because of the insufficient information for the target company and the lack of unified M&A law, there are many disputes after enterprises M&A. Thus, In order to decrease such law risks in M&A, the merger needs to hire lawyers to do due diligence (DD) to the target company for reduce relevant law risks.Legal DD is a kind of investigation took by lawyers who hired by the merger to the target company on its law status and law risks it faced. The legal DD plays an important role in decreasing the legal risks of M&A for merger, and can help the merger to acquire the business, law, and risks status information of the target company as soon as possible..This paper takes the legal DD in M&A as the study subject, and analyses the legal DD from the stand of merger and its lawyers and the angle of practice. Moreover, the paper also does some study on how to write legal DD report suitable.The paper is consisted of five chapters. Chapter I firstly introduces the definition, main methods and historical developments of M&A. Secondly, the chapter analyses the legal risks the merger might face in M&A.Chapter II discusses the elementary theory of legal DD, and presents the legal DD's definition, importance, basic principles and its limitations.Chapter III mainly analyses the important relevant laws of M&A, and discusses the relevant laws of the listing company M&A, state-owned company M&A, and foreign capital M&A. Moreover, the chapter also analyses the influences of Anti-Monopoly Law for M&A.Chapter IV mainly studies the M&A legal DD practices, and presents the stages, methods, and investigation contents of legal DD.Chapter V discusses the writing of legal DD reports. This chapter mainly presents the principles, the main contents, and other relevant issues of writing legal DD reports.