Environmental Due Diligence

Environmental considerations are extremely important in planning and carrying out mergers, acquisitions and real estate transfers. It is not inconceivable that potential or actual environmental liabilities could exceed the targeted company's net worth or the book value of the real estate of interest. It is therefore essential that an environmental due diligence investigation (DDI) be performed to quantify environmental liabilities before sales, mergers or acquisitions. This paper will discuss general procedures used in environmental due diligence investigations. The emphasis will be placed on mergers and acquisitions. It should be pointed out that the procedures discussed in this paper are general and must be modified to fit each particular merger or acquisition under consideration.