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HR Due Diligence
When it comes to corporate takeovers (M&A transactions), the employees are an important factor in determining the venture’s success or failure. HR due diligence ensures transparency regarding the opportunities and risks involved in taking over the workforce, before the decision to proceed with the purchase has even been made, and thus also provides a realistic evaluation of the anticipated synergistic effects. Both have an impact on the calculation of the purchase price and the cost of subsequent integration measures (post-merger integration).
Alongside the classic areas of investigation such as remuneration structures, employment contracts, pension obligations and personnel costs, analyses of the target organisation, corporate and management culture, and a detailed evaluation of the management’s (and even key employees’) skills, competences and experience represent a vital component of HR due diligence. Since should these individuals leave the company shortly following the takeover, this frequently results in the loss of that upon which the rationale of the takeover is based.