Mergers & Acquisitions
Aon Mergers & Acquisitions Solutions (AMAS) 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. AMAS accesses the global knowledge and expertise from all of Aon to ensure that our clients are properly advised on their issues and the best way to resolve them and successfully complete their Mergers & Acquisitions transactions.
Examples of issues that might be identified including the following:
- Inadequate levels of current or historic cover, leaving the target open to uninsured claims and related costs that would otherwise be transferable to the insurance market
- A corresponding lack of allowance within budgets for the true cost of an appropriate insurance programme
- Inaccurate recording of claims records which might negatively impact on future insurance premium costs
- Insurance related capital expenditure issues
- Transfer of responsibility for pre-closing 'insurable' liabilities where cover is unavailable or cost prohibitive for the buyer.
Transaction Liability Insurance (TLI)
TLI encompasses several products which help facilitate M&A transactions and assist buyers and 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:
- Tax Liability Insurance
- IPO Liability Insurance
- Environmental Liability Insurance.
- Advice to private equity companies on the purchase of insurance for existing investee companies including portfolio buying programmes
- Employee benefits due diligence services and consulting.