Insurances can contribute to facilitate M&A processes as well as to cover foreign investment risks in a later stage.
Katrien Vorlat (Stibbe) treated the different stages of a sales process, both in the case of a voluntary sale and an auction, starting from the indication of interest, over the signing agreement, to the closing and even the post closing issues. The emphasis was on the importance of a proper due diligence and the dynamics within the global process that is influenced continuously by the different interests of seller and buyer.
Next, Andrew Hunt explained (Marsh London) how over the past few years, the insurance market has been searching for solutions and can represent its "Transactional Risk Solutions " as a means to cover unprecedented and unforeseeable risks within the framework of a Warranty & Indemnity Insurance on the one hand, and to provide a cover for other contingent risks (such as tax, environmental, litigation buyout, ...) on the other hand.
Priscille Hérault (Tokio Marine HCC) presented a clear overview of the mechanism of such insurance and demonstrated through concrete cases which solutions exist to safeguard the interests of both seller and buyer. She completed her overview with a survey of the key parameters (limits, deductibles, premium and time schedule) that apply in this respect.
Last speaker Karel Vanderputte (Delcredere / Ducroire) went even further in treating the topic of political risks an investor with Belgian interests may be confronted with abroad. Using practical examples, he explained the solutions that exist to deal with various risks such as expropriation, political violence, business interruption, embargo, ...
His closing line was therefore very to the point: "Question is not "Will anything happen?", but rather "If something happened, what would be the impact on my investment?”.
Please find the slides here: