03 / 03 / 22
Due Diligence for Private Acquisitions in Mexico
MEXICO CITY, MEXICO, March 3rd, 2022 – Our partner María Teresa Paillés and associates Jiro Gorozpe and Carlos Fernández participated in the Practical Law Practice Note “Due Diligence for Private Acquisitions in Mexico” released by Thomson Reuters in March 2022. This practice note considers the purpose, scope, and practical aspects of a legal due diligence investigation for the purchase of a private company or business in Mexico. It outlines the process for legal due diligence in Mexico, including organizing the investigation and various sources of information. It also considers issues of confidentiality and data protection during due diligence in Mexico.
Due diligence is the investigation of a person or business. In the context of business acquisitions, the parties use the due diligence process to gather information about each other and about the target business or assets that are for sale. Although the seller occasionally conducts due diligence on the buyer (see Box, Seller Due Diligence), the due diligence process is usually more significant for the buyer.
Completing a due diligence investigation of a business can be more challenging and complex for a buyer in cross-border transactions.
Due diligence practices can vary significantly between countries because of different:
- Legal and regulatory practices.
- Financial reporting systems.
- Business practices, expectations, and customs.
If different jurisdictions are involved, it is important for the buyer to understand the local legal and financial systems, operations, and culture.
This Note considers, from the buyer’s perspective, the purpose, scope, and practical aspects of a due diligence investigation for a private share or asset purchase in Mexico. It outlines the process for legal due diligence, including:
- How to organize the due diligence process.Financial reporting systems.
- The various sources of information in a typical due diligence investigation.
- How the information gathered should be reviewed and presented.
It also considers issues of confidentiality and data protection in Mexico.