Mergers and Acquisitions (M&A) Insurance

Launched in 2020, M&A Insurance can facilitate mergers and acquisitions in the Brazilian market. This insurance excludes the need for an “Escrow account” to cover liabilities not identified in the “Due Diligence”.

In M&A transactions, the buyer generally requires a guarantee from the seller to cover possible contingencies during the merger/acquisition process or sale/purchase price adjustment. They usually use the opening of an escrow account, also known as an “Escrow account”, where part of the value of the transaction is deposited, or there is also the possibility of withholding payment installments by the buyer, granting real guarantees, contracting a guarantee bank or corporate guarantee (provided by another company).

M&A Insurance is a guarantee insurance product and replaces all the aforementioned modalities, in addition to offering advantages for both parties, buyer and seller, as follows:

Buyers
– Possibility of offering a more attractive value to the seller
– Less bureaucratic access to resources compared to the Escrow account

Sellers
– Waiver of offering assets in guarantee
– Receipt of the full value of the sale value without retention of installments to guarantee future