How to complete a transaction ?

Foreign Corrupt Practice Act Américain

Validating an opportunity

The due diligence process is an essential step in the validation of an opportunity for a business. It allows to limit the risk in a transaction, There are mainly four types of risks:

  • market risks are the risks of losses due to changes in the market value of a portfolio of financial instruments. The management of these risks needs to do in the short term, and regularly.
  • counterparty risks are characterized by the fact that the person making a loan should bear a risk of default by the borrower. This failure may relate to all or just a part of the money lent, and may result from an unwillingness on the part of the debtor or his inability to repay its debt.
  • operational risk is the risk of losses due to personnel errors, systems or processes, or due to external events, such as the risks of damage to production facilities, technological risks, climate risks, risks environmental, health risks, etc …
  • reputational risks mean the risk of losses due to deterioration of a company’s brand image. This devaluation of the image can be linked to social scandals, health or environmental. The reputational risk is difficult to assess because it must take into account the information propagation speed and the potential impact on public opinion.

Before finalizing a transaction, it is essential to take into account all of these risks and how to measure them. Due diligence is a very valuable decision support.