Continuing from Part 1, let’s uncover more hidden liabilities that Buyers should watch out for in an M&A transaction.

Key Areas to Uncover:

The above list is not exhaustive – the scope and depth of liabilities vary based on the target’s business, structure and industry.

A detailed and transaction-specific due diligence is therefore crucial to uncover hidden liabilities and shield the value of a buyer’s investment.

When assessing a potential acquisition, don’t stop at the balance sheet. Corporate liabilities extend far beyond bank borrowings – they can hide in contracts, compliance gaps or forgotten obligations.

In Part 1 of Corporate Liabilities – More than Just Loans, discover the key areas every Buyer should uncover through due diligence.

Key Areas to Uncover:

The above list is not exhaustive – the scope and depth of liabilities vary based on the target’s business, structure and industry.

A detailed and transaction-specific due diligence is therefore crucial to uncover hidden liabilities and shield the value of a buyer’s investment.

The Estée Lauder Companies Inc is reportedly exploring strategic M&A opportunities involving Puig, the Spanish beauty and fashion group, as part of its broader portfolio optimisation and growth strategy. While details of a full acquisition remain speculative, Estée Lauder has recently acquired a stake in luxury skincare brand 111SKIN, which is backed by Puig – signalling potential alignment between the two groups in the premium beauty segment.

From a strategic standpoint, this potential transaction would reflect a broader trend in the global beauty industry, where established industry players are pursuing partnerships and acquisitions to strengthen their presence in luxury and niche segments. A combination of Estée Lauder’s global distribution capabilities with Puig’s strong brand portfolio could create a more diversified and competitive player in the industry.

These developments highlight the increasing role of strategic investments and minority stakes as precursors to larger M&A deals, while underscoring the execution and integration considerations in cross-border consumer deals.

LDD helps buyers identify risks that may affect valuation, deal structure, and in some cases, the decision to proceed with the transaction.

Here’s what buyers typically prioritise – and why it matters for both sides.

1. Ownership & Corporate Records

• Whether the seller truly owns the shares/assets being sold?
• Are corporate secretarial records complete, updated, and accurate?
• Any missing paperwork that may attract a penalty from any relevant authorities?
• Buyers often rely on clean and consistent records to assess risk.

2. Contractual & Commercial Obligations

• Buyers typically look into key customer and supplier contracts.
• Any contracts requiring approval for a change of control?
• Vague termination provisions and unfavourable terms in contracts may be seen as red flags.
• Contracts with revenue concentration are especially scrutinised.

3. Compliance & Regulatory Issues

• Whether the target company possesses valid licences, permits, and sector-specific approvals.
• Any past or ongoing breaches of law, enforcement actions or investigations by relevant authorities?
• Buyers are concerned as compliance gaps can impact business operations post-completion.

4. Liabilities

• Does the target company take out any loans or provide guarantees?
• Any past or ongoing disputes (e.g. litigation cases, employment / industrial disputes)?
• Buyers want visibility into the potential liabilities and exposures so they do not inherit “unknown” surprises.

Smooth and organised LDD equates to a smoother negotiation process.

The more prepared the seller/target company is, the shorter the journey to signing and completion of the transaction.

Unilever and McCormick & Company (“McCormick“) have announced an agreement to combine Unilever Foods business with McCormick, in a transaction valuing the business at approximately US$44.8 billion. The proposed transaction will see Unilever and its shareholders receive a majority equity stake in the combined entity, forming a global flavour-focused company with significant scale across retail and food service channels.

Structurally, the transaction is expected to be implemented through a Reverse Morris Trust arrangement, enabling a tax-free separation of Unilever Foods business for US federal income tax purposes while combining it with McCormick’s existing operations. This reflects a growing trend of strategic carve-outs and business separations in large-scale M&A, particularly where conglomerates seek to enhance portfolio focus in a tax-efficient manner.

Taken together, the proposed combination highlights how complex deal structuring and tax considerations remain central to executing large-scale transactions.

In this M&A Byte, it explains the early seller preparations, which typically include:

• Clean and updated corporate records
• Well-reviewed contracts with key risk clauses identified
• Clear financials and managed liabilities
• Consistent HR and operational compliance

Strong housekeeping isn’t administrative hygiene; it is a commercial advantage.

Here’s how sellers can prepare.

1. Update Corporate Records & Documents

• Ensure statutory books, registers, resolutions and corporate secretarial documents are accurate and updated.
• Accuracy in corporate records prevents back-and-forth during legal due diligence.
• Clean records help sellers present a more reliable and organised corporate profile.

2. Review Key Contracts

• Identify crucial clauses such as change of control, exclusivity and liabilities clauses.
• Check for auto-renewals, termination mechanics or obligations material to the buyer.
• Well-structured contracts reduce risk and build buyer confidence.

3. Clean Up Financials & Liabilities

• Ensure tax filings, statutory payments, and outstanding obligations are up to date.
• Buyers value transparency – clean financials help reduce risk on deal certainty.

4. Strengthen HR & Operational Compliance

• Ensure proper and consistent records of employment contracts, payroll, and EPF/SOCSO compliance.
• Missing documentation is frequently raised as a red flag in legal due diligence.

“Deal readiness” is not just about good housekeeping – it strengthens the seller’s negotiation position and helps build trust with buyers.

Luckin Coffee, China’s largest coffee chain, through its controlling shareholder Centurium Capital, is reportedly set to acquire the global café operations of Blue Bottle Coffee from Nestlé, valued at under US$400 million. If completed, the deal would combine Luckin’s technology-driven, high-volume coffee model with Blue Bottle’s premium specialty coffee brand and established international retail presence.

The proposed transaction also reflects a broader trend in consumer-sector M&A, where high-growth brands pursue acquisitions of established premium labels to diversify their brand portfolio and tap into new consumer segments. It also highlights how cross-border acquisitions continue to play a key role in global brand expansion, particularly in competitive consumer markets, such as specialty coffee.

This M&A Byte maps out:

• The core documents in a typical deal
• When they appear in the transaction lifecycle
• Why each one matter

Phase 1: Setting the Foundation 

Phase 2: The Discovery & Core Agreements

Phase 3: Completion & Closing Mechanics

Phase 4: Post- Completion 

Every M&A deal is built on a suite of documents, each shaping the deal, defining risks and guiding decisions.

Understanding the purpose and interplay of these documents is essential for smooth execution, effective risk management and informed decision-making.

We are pleased to have acted for the Purchaser in the acquisition of freehold industrial land located in Bandar Sri Sendayan, Negeri Sembilan.

The conditional sale and purchase agreement was entered into on 27 January 2026 with Sapura Machining Corporation Sdn Bhd, a wholly owned subsidiary of Sapura Industrial Berhad, for the acquisition of approximately 35,332 square metres of land at a total consideration of RM24.72 million.

Every business acquisition starts with a critical question: Are you buying the company, or just the assets that matter to you?

• In a Share Sale, you acquire shares in the company — this may be 100% of the shares (full control) or a partial share sale. In either case, you take on the company’s assets, liabilities, contracts and its full corporate history.
• In an Asset Sale, you selectively acquire only the assets and operations you want, leaving the rest with the Seller.

Key Differences between Share Sale & Asset Sale:

Pros & Cons for Buyer and Seller:

Choosing between Share Sale and Asset Sale is more than just a technical decision – it affects your legal exposure, tax implications, operational control and transaction complexity.