Mergers and acquisitions are key proponents of growth and the companies that use these tools know more than most about the complex preparation that is involved. In all aspects from deal structuring to strategic implementation, the management of highly confidential data is imperative to a successful outcome.
Data is a resource that has become more valuable over time. Particularly so in the context of global mergers and acquisitions. Described commonly as M&A for short, mergers and acquisitions represent thousands of transactions each year. Last year they scaled over $4 trillion internationally, showing a peak in popularity since the 1980s.
Political instability in Europe coupled with trade war between the United States and China are fuelling market uncertainty. However, data rooms used during the M&A process combine security, unlimited storage, confidentiality and meet compliance needs. Choosing a DiliTrust Data Room solution for your M&A transaction meets all of these requirements.
CHALLENGES RELATED TO DUE DILIGENCE
During the M&A process, challenges concerning due diligence can rise to the fore. In other words, the set of verifications that an investor initiates during the transaction process. The main risks that challenge the smooth outcome of these processes concern taxation legislation and political stability in the region covered by the agreement. Another key concern is regulation. These risks are even greater when a cross-border M&A is in operation.
In the context of sensitive data exchange, a virtual data room in order to be effective must guarantee total security during document exchanges and storage. The main objective of the data room solution must overall highlight model organisation of transactional due diligence. This can be realised by solutions which consider the protection of shared data, access control by authorized users and the existence of statistical modules and alerts.
AMERICAN DATA ROOMS: LOCATED IN EUROPE, SYNCHRONIZED WITH THE UNITED STATES
As a result, the solutions developed by traditional American data rooms are coming under fire. How can they guarantee the total preservation of data when they are subject to the CLOUD Act? A gentle reminder: the main objective of this U.S. federal law, legislated by Congress in 2018, is to monitor personal data.
For example, by submitting a simple warrant, federal and local law enforcement agencies can compel U.S. service providers to provide the requested data stored on their servers, whether they are located in the United States or in a foreign country. This includes both the data contained in storage and the personal data constituting their profile. In addition, American law enforcement agencies have the possibility of obtaining the latter without the individual being informed. In essence U.S. federal agencies can demand any information in any context, provided that it was held on an overseas server controlled by a U.S. company.
DILITRUST DATA ROOM: A EUROPEAN SOLUTION THAT IS GDPR COMPATIBLE
4%: this is the percentage deducted from the turnover of companies that do not comply with the General Data Protection Regulation (GDPR), a strict European data legislation which has been applicable in all 28 Member States of the European Union since 25 May 2018. Its two main objectives are to increase the protection of personal data and the accountability of those who process this data. American data rooms cannot offer clients the same European-centric approach to data privacy that their GDPR compliant counterparts can.
DiliTrust Data Room allows users during the M&A process to simply and securely carry out their operations securely. Data is stored on servers in France, Canada and in Dubai and data is never subject to U.S. legislation. Users are also offered 24/7 support to better support their project. Find out more about why all M&A’s can benefit from a secure data room here.