Ensuring Compliance & Risk Mitigation: WIDEN’s Expertise in Complex M&A Due Diligence

24 марта, 2025

In the interests of its Client, WIDEN conducted a multi-stage, comprehensive due diligence focusing particularly on regulated sectors, as well as competition law matters, and national security issues related to critical infrastructure. This detailed, multi-stage, and strategically designed approach ensured compliance assessment with regulatory requirements and an analysis of whether the target company is legally recognized as a critical infrastructure entity. Given the critical nature of the transaction, our team conducted a rigorous and exhaustive assessment, evaluating every aspect of the target company’s operations, documentation, and regulatory compliance.

A key area of focus to verify that the target company possessed all required documentation related to the handling, storage, and transshipment of specific chemical substances in maritime transport. This specific chemical substance is a highly dangerous chemical compound—extremely flammable, toxic, and classified as a carcinogen—requiring rigorous safety measures in handling and transportation. The strict regulatory framework governing this substance made it imperative to assess whether the target company had implemented the necessary safeguards, protocols, and licensing requirements to manage such hazardous materials without legal or environmental liabilities.

Additionally, the in-depth legal due diligence included a legal assessment of the target company’s operations in the waste management sector, which was a particularly important aspect to evaluate in this case, given that the company’s core business involves the storage and loading of chemicals. These included mixed metals, hazardous absorbents and filter materials (such as oil filters), wiping materials and protective clothing contaminated with toxic substances, as well as fluorescent lamps and other mercury-containing waste. Given the increasing global emphasis on sustainable and compliant waste disposal practices, it was critical to ensure that the target company adhered to stringent environmental regulations and best practices.

Simultaneously with conducting the in-depth legal due diligence, WIDEN also analysed the key contracts essential for the target company’s business operations, identifying the most significant risks and providing the client with recommendations for risk mitigation or elimination. The evaluation of key contracts also included an assessment of international supply and transportation agreements, along with a comprehensive risk analysis.

Additional complexity arose from the fact that the target company operates in a freeport zone and has constructed a building on state-owned land with lease rights that are time limited. As a result, the regulatory framework regarding divided property rights and relevant case law on this matter were analysed. WIDEN provided further action steps and legal mechanisms to ensure that the target company could continue using the building.

Upon completion of this comprehensive and meticulous legal due diligence, WIDEN team proceeded with the drafting of the Share Purchase Agreement (SPA), ensuring its alignment with all legal requirements and the client’s strategic objectives. Every contractual provision was carefully aligned with the client’s strategic objectives, ensuring that all identified risks were addressed and that the acquisition terms provided optimal legal and financial protection. Beyond drafting the agreement, we navigated the legal and procedural intricacies necessary to ensure a smooth and fully compliant transaction completion. It is important to note that the transaction was contingent upon approval by the Cabinet of Ministers of the Republic of Latvia.

By managing regulatory complexities and mitigating risks, our team facilitated a smooth acquisition process. Our ability to navigate high-risk industries and specialized economic zones played a crucial role in the transaction’s success.