Legal due diligence, a crucial part of the M&A process, is a relatively new tool in Russia. Nevertheless, it has become a compulsory stage in most major M&A transactions involving Russian companies. Generally, extensive legal due diligence in Russia takes place in complex deals involving sophisticated parties, wherein the underlying deal documents are governed by foreign law (typically, English or US). Because Russian law does not regulate legal due diligence, the process usually adheres to unwritten rules adopted from Western business and legal practice.
Most potential purchasers are unwilling to buy a company without a thorough investigation. Well-structured due diligence provides the opportunity for the purchaser to examine the target’s documents and investigate its operations and financial condition. This step helps to achieve the following goals:
