JULY 2013

Legal Focus

91

In certain industries, such as real estate or the pharmaceutical business, where dealings with governmental bodies are common, the potential for corruption is higher and this should also be considered.

In this respect, forcing compliance with the buyer’s more rigorous standards (if the buyer has more rigorous standards, which unfortunately is not always the case) is a worthy exercise and a serious investment. Over time, the investment is easily repaid, especially considering the international reach of such statutes as the Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act or, in fact, the current European provisions in similar fields. The sanctions which may apply in case of violation of these rules may include restrictions to doing business and dramatically affect the economics of an otherwise well thought through M&A deal.

This is also a field in which the right assessment of risk is key to success. Sometimes, the issue is not whether to do a deal or not but how to structure it, maybe carving out or closing the parts of target’s business which are not compatible with the buyer’s compliance standards. These are delicate choices for any manager and for a law firm assisting in the acquisition process. It takes a lot of experience: there usually is not a one-size solution for all. Rather, you need to devise a framework and put reputation, compliance and integrity risks into the perspective, together with the costs needed to remedy the unsatisfactory context which was discovered.

What are the key taxation considerations for investors when embarking upon mergers and acquisitions in your jurisdiction?

In M&A taxation comes into play twice: first of all, at the time of structuring the transaction, in order to optimize the use of the financial resources allocated to the acquisition. Second, during the due diligence or after completion: in this case the main issue is the appropriate way to deal with the potential tax liabilities of target arising from previous years and not already ascertained. The rigorous approach of local tax authorities in applying tax avoidance rules may be an area of additional concern.

In your experience, what are the most common challenges that arise? How do you assist your clients in overcoming these challenges?

Cross border M&A is always more complicated than domestic M&A and it is often also more potentially rewarding. Here, not only the parties encounter the usual difficulties of buying into (or selling) a new business for which they have to understand well, amongst other things, the needs and requirements of the other side, but they have to take into account the nature of the deal and establish a relationship based on trust: in extraordinary transactions, typically lasting a few months and negotiated by people who, at the

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beginning of negotiations, do not know each other, this is never obvious. In this respect, we have historically been good at bridging the gaps (financial and cultural) between buyers and sellers. I believe that this is a result of the fact that we are both an international law firm, whose culture spans several jurisdictions, and a local law firm, with deep roots in the country where we operate. This is in fact a common feature within the world of Willkie’s local offices. As a result, our clients tend to benefit of a more trusting relationship with their counterparties, which fosters success in the negotiations. In Italy, we make the foreign client feel like an insider in the Italian business arena. The resulting comfort brings about the right attitude to doing business and allows to accurately select the right transactions to complete. LM

Maurizio delfino was a founding partner of Delfino e Associati Willkie Farr & Gallagher LLP. He specializes in M&A, Private Equity and Capital Markets.

1976 JD, summa cum laude, La Sapienza University of Rome

1977 Master degree in Administrative Law, summa cum laude

1979 Admission to the Rome Bar

1983 Stanford Law School: Doctor of the Science of Law. Fulbright scholar.

Maurizio is a member of the Italian Association of European Lawyers, the Italian Association of Administrative Lawyers, the American Bar Association and the International Bar Association.

Contact:

Maurizio delfino tel: +3902763631

Email: mdelfino@willkie.com