Tax in M&A: Tax Warranty and Indemnity
InsightIn an M&A transaction, Tax Warranty and Indemnity (W&I) insurance policy is a key risk management tool you should consider to safeguard your transactions.
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Grant Thornton’s Dealtracker – our analysis of the Australian M&A and private equity markets – has demonstrated that despite COVID-19 trading conditions in the past 18 months, M&A deal volumes are up in Australia. In fact, this period has seen the highest level of deal volumes in the Australian market since 2010.
But what can be common in M&A deals are missed opportunities to optimise your tax, unnecessary tax leakage, not to mention identifying key tax risks to be mitigated. The more work you do at outset of a deal – while taking a long-term view of the transaction – can result in significant saved dollars.
Our Tax in M&A team regularly produces content on the latest developments and trends in M&A transactions. You can read in more detail below.
In an M&A transaction, Tax Warranty and Indemnity (W&I) insurance policy is a key risk management tool you should consider to safeguard your transactions.
While this deal mechanism has been used in transactions for some time, we are likely to see an increase of earnouts used in future M&A negotiations given the uncertain and unpredictable economic climate ahead.
No one M&A transaction is the same. Each brings about their own unique set of considerations and conditions.