Around nearly a third of international takeovers almost 30% reveal sizeable problems, or ‘material liabilities’, after the deal is done; this is often because usual checks don’t pick up on the dangers specific to each country. In deals between Kenya and the EU, these problems often show up where the length of time it takes to register land, the registering of security, and sticking to EU data and competition laws all come together. Ordinary, ready-made forms don’t usually deal with the mixed risks which are between the law systems not in just one of them.
Recent looks at African-European manufacturing and technology deals which have happened have revealed three common things that aren’t noticed: not finding out who really owns things in full, not checking that people outside the deal have given their permission in old contracts, and thinking that registering with the authorities will happen on its own, when it needs local steps to be taken. Each of these has caused the value of the deal to go down by between €2m and €7m – especially when the time to get things sorted before the deal is finished is short.
A careful, three-part check system cuts these dangers down a lot. First, at the same time, checking land and company records through Kenya’s digital records and EU official confirmations makes sure the things being bought are real. Second, a very careful check of possible debts and what might be owed, which is in line with rules about what is allowed in the particular business area, finds hidden duties before the deal is signed. Third, testing what would happen if someone asked for money back, or something unexpected happened, in both countries, makes it clear who will take the risk after the deal is done. International groups using the 60+ country support of ALFA International use these many-level checks to keep things the same between the law systems, instead of seeing them as different.
This all-in-one method has been good at finding most of the hidden claims before the deal is signed in difficult takeovers in several countries which Kenyan M&A lawyers who are highly-rated by Chambers have dealt with; it makes investors more sure, and keeps the deal’s worth