The One Brief is Aon's weekly guide to the most important issues affecting business, the economy and people's lives in the world today.
Mergers & Acquisitions
Aon Mergers & Acquisitions Group (AMAG) is the leading provider of insurance due diligence, transaction liability insurance and risk management advice to private equity and strategic buyers and sellers in the Asia-Pacific region.
Insurance Due Diligence
Our objective is to identify insurable risk and cost issues that would not otherwise be considered in depth by other advisers but which will have an impact on financial modeling, deal price negotiations and acceptance of liabilities by a buyer. AMAG accesses the global knowledge and expertise of the entire Aon group to ensure that our clients are properly advised on the issues arising and the best way of overcoming these, so they can complete their transactions.
Examples of issues that might be identified including the following:
Transaction Liability Insurance (TLI)
TLI encompasses several products which help facilitate M&A transactions and assist buyers & sellers to overcome issues that may have brought a deal to a standstill. The products can also be used as strategic tools to differentiate bids or remove liabilities from a bid.
The main example of TLI is Warranty & Indemnity Insurance (W&I). W&I can protect the seller or buyer for a breach of seller warranties (or tax indemnity) given in a sale agreement. Buyers of a business will seek compensation if the target company’s state of health was inaccurately represented at the time of sale, causing financial loss. They would normally pursue such compensation through a claim for a breach of warranty – this policy can sit behind such warranties or become the source of indemnity in the event of a breach, replacing Escrow accounts, for example.
Other TLI products