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ESG Scrutiny Heightened in Uncertain M&A Market

Intelligence, data and analysis provider Mergermarket, which is owned by Aon, released its latest edition of the M&A Risk in Review series, highlighting the increasing importance of ESG considerations in deals. Ninety-six percent of respondents anticipate a rise in ESG scrutiny over the next three years, with 48% expecting a significant increase. When asked about potential concerns disputes in deals, 24% of respondents cited environmental litigation as the primary issue. According to the survey, 46% of respondents anticipate an increase in the number of deals globally over the next 12 months compared to 2022, while 20% expect the figures to remain consistent with current volumes. However, the report highlighted numerous challenges facing M&A strategies, including climate, tax, cyber risk, market dislocation, and geopolitical uncertainty. Dealmakers are urged to adopt proactive measures to control controllable risks, develop mitigation plans for external risks, and utilise risk transfer solutions when available. Dealmaking is about balancing risk and return,” said Alistair Lester, Global Co-CEO of Aon’s M&A and Transaction Solutions. “With strong risk mitigation processes in place, including a multidisciplined approach to due diligence and the strategic use of insurance capital, dealmakers are able to transform their risk into opportunity to improve their deal outcomes.”

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