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Environmental Due Diligence (DD) for M&A, etc.

image of Environmental Due Diligence (DD) for M&A, etc. 01With the share transfer and exchange system enforced since 1999, corporate mergers and acquisitions (M&A) have taken place actively for corporate group restructuring and business integration. In addition to a growing interest in recent environmental issues, the environmental due diligence (DD) has grown further in importance for corporate M&A, following the enforcement of the Soil Contamination Countermeasures Act in February 2003, the publication of new accounting principles concerning asset retirement obligations (asbestos, polychlorinated biphenyl waste [PCBs waste], and soil and groundwater contamination) in March 2008.

image of Environmental Due Diligence (DD) for M&A, etc. 02As a pioneer in the geo-environmental field, E&E Solutions has served clients since the beginning of 1990s. With a wealth of achievements and experience all over the world, we propose investigation methods meeting clients’ needs, and offer assistance for smooth implementation of M&A of corporations in a wide variety of industries.

Examples of our services

  • Environmental DD
  • Soil and groundwater investigation and remediation
  • Extraction of potential risks of soil/groundwater contamination and general environmental risks
  • Calculation of asset retirement obligations
  • Scrutiny of the legal compliance status and environmental management status

What is Environmental Due Diligence?

Image of What is environmental due diligence?
Environmental DD is a process to find out potential environmental issue with regard to the site that is the subject matter of a transaction such as an M&A or a real estate deal. In the case of any issue is discovered through environmental DD, it may be necessary for the parties concerned to negotiate contractual terms during their negotiation period, reflect costs for countermeasures and improvements in the purchase price, and implement such countermeasures and improvements. Depending on the extent of such issue, the parties' contact may fall apart. In environmental DD for an M&A etc., it is necessary to make an accurate judgment within various constraint conditions including a limited period of time, budget, information, and the access to the target site. On the basis of our rich experience, we propose the most appropriate investigation method under given conditions, and judge risks accurately.

Methods of Environmental DD

Image of Methods of Environmental DD

In environmental DD, a Phase I Environmental Site Assessment (ESA), which does not involve the sampling of soil or groundwater, is implemented. Depending on the results of this Phase I ESA, another investigation into soil and groundwater or a remediation may be carried out. Our company performs a Phase I ESA in conformity to Practice Standards (E1527-13 etc.) of ASTM International of the USA. However, upon a client’s request, we can also implement document review in a data room, review of past reports (desktop study), etc.

Environmental Due Diligence All Over the World

Image of Environmental Due Diligence All Over the WorldIn recent years, Japanese companies have actively executed M&A of overseas corporations (in-out type). Further, in an M&A between Japanese companies (in-in type), the counterparty may have factories abroad. For such a case, the demand for environmental DD on overseas factories has been rising.
Our company’s globally expanding network of a number of consultants etc., enables us to carry out assessments on the basis of the applicable environmental laws and regulations of each country and the actual local situation.

Examples of our services

  • Our engineer’s direct service on overseas sites upon request of a client
  • Report for overseas customers and investors (in English or local languages)

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