Bulgaria: Covid-19 Crisis: Changes to W&I Insurance in M&A Deals

What warranty and indemnity insurance might look like post-virus

The Covid-19 crisis, like every other crisis, will likely lead to market consolidation. Companies severely affected by the pandemic will be looking to sell their business but may not be able or willing to provide parent guarantees or retention amounts to satisfy buyers’ transaction certainty requirements. Buyers, on the other hand, will want to acquire underperforming businesses (especially from competitors), likely at a discounted price, but may be worried about their post-completion recourse against the sellers. Warranty and indemnity (W&I) insurance could be a useful tool to assist both sides.

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