Strategic Due Diligence for Sensitive Transactions

Assessing All Risks Affecting Sensitive Transactions

Assess the strategic, sovereignty-related, and institutional risks that may affect the execution of a sensitive transaction.

In certain transactions, financial, legal, or tax due diligence is no longer sufficient.

The actual feasibility of the deal also depends on factors that are more difficult to identify:

exposure to foreign investment screening;
institutional perception of the transaction;
sovereignty sensitivity of the asset;
technological or industrial dependencies;
political or media risk;
governance vulnerabilities;
strategic acceptability of the investor;
exposure to State risk;
economic sovereignty issues.

A transaction may be legally feasible but strategically blocked.

Relians assists investors, investment funds, industrial groups, investment banks, and advisors with strategic due diligence on sensitive transactions exposed to economic sovereignty, national security, or regulatory control issues.

Due Diligence Focused on Deal Execution

Strategic due diligence is not intended merely to identify theoretical risks.

It is designed to answer one essential operational question:

Can the transaction actually be executed under acceptable conditions of timing, valuation, governance, and security?

Our approach consists of analyzing the real strategic exposure of a transaction before it enters its critical phases:

indicative or binding offer;
entry into exclusivity;
negotiation of the SPA;
financing structure;
administrative consultations;
transaction communications;
authorization process;
closing.

This approach makes it possible to anticipate, at a very early stage, the factors that may impair deal certainty, affect the transaction timetable, or weaken the execution of the transaction.

What Traditional Due Diligence Does Not Always Identify

A transaction may appear secure from a:

legal;

financial;

tax;

contractual;

accounting;

standpoint, while remaining significantly exposed to:

an administrative refusal;
sovereignty-related conditions;
political opposition;
reputational risk;
deterioration of the transaction timetable;
unfavorable interministerial arbitrations;
economic sovereignty risk;
loss of institutional credibility;
a challenge to the transaction itself.

Strategic due diligence is specifically designed to identify these factors before they become execution obstacles.

It provides a strategic, institutional, and sovereignty-based reading of the transaction in order to anticipate vulnerabilities that may affect the actual feasibility of the deal.

Transactions Covered

We mainly assist on transactions involving:

sensitive technologies;
critical infrastructure;
dual-use activities;
strategic supply chains;
sensitive data;
assets linked to defense, aerospace, space, or energy;
sectors exposed to economic sovereignty issues;
French-U.S. or international transactions exposed to several control regimes;
acquisitions that may fall within the scope of French foreign investment screening;
transactions exposed to a high level of State risk.

Frequently Encountered Situations

Strategic due diligence can be particularly useful in the following situations:

acquisition of a company holding dual-use technologies;
foreign investment in a defense-exposed company;
acquisition of a strategic supplier;
minority investment in critical infrastructure;
transaction exposed to French FDI control or to several FDI screening regimes;
carve-out of sensitive activities;
acquisition likely to become an economic sovereignty issue;
transaction exposed to significant media or political sensitivity;
cross-border transaction exposed to geopolitical considerations;
acquisition requiring a high level of deal certainty;
French-U.S. transaction exposed to both CFIUS and French FDI screening.

What Our Strategic Due Diligence Covers

Regulatory and Sovereignty Risk Analysis

exposure to French FDI control / FDI screening;
thresholds
analysis of control thresholds and criteria;
mapping of the relevant authorities;
identification of risks of conditions or refusal;
analysis of European and international risks;
exposure to economic sovereignty issues;
assessment of transaction regulatory risk.

Institutional Analysis and State Risk

strategic perception of the transaction;
political sensitivity of the case;
parliamentary or media exposure;
industrial sovereignty issues;
analysis of public stakeholders likely to intervene;
identification of institutional friction points;
assessment of the likely level of administrative scrutiny;
analysis of State risk and political context.

Investor Analysis and Perception

shareholding structure;
geopolitical exposure;
governance transparency;
foreign dependencies;
risks associated with perceived economic nationality;
institutional credibility of the acquirer;
the investor’s ability to achieve strategic acceptability.

Strategic Analysis of the Target

critical technologies;
industrial dependencies;
sensitive contracts;
links with operators of vital importance;
defense or national security exposure;
role in French or European strategic supply chains;
potential sovereignty vulnerabilities;
level of sovereignty exposure of the asset.

Our Deliverables

Strategic Due Diligence Memorandum

A structured strategic memorandum designed to identify:

the main execution risks;
sovereignty vulnerabilities;
regulatory risks;
potential blocking scenarios;
authorities likely to intervene;
key deal-related points of attention;
factors likely to affect deal certainty.

The memorandum may be used in particular:

before a binding offer;
in an investment committee;
in connection with financing;
to arbitrate a transaction structure;
to prepare an approach to the authorities;
to secure transaction communications;
to prepare sensitive institutional discussions.

The objective is to provide a clear, rapid, and operational assessment of the issues likely to affect execution of the transaction.

State Risk Mapping

A concise document designed to assess:

the level of strategic sensitivity;
institutional risks;
political exposure;
the likely level of administrative scrutiny;
the main economic sovereignty factors;
the fragile areas of the deal.

FDI & Sovereignty Risk Assessment

An operational assessment of the risk of:

authorization;
conditions;
timing;
potential remedies;
of
actual feasibility of the transaction;
ikely level of deal execution risk;
sovereignty exposure of the transaction.

Deal Execution Advisory

Strategic recommendations for:

M&A teams;
executive management;
investment funds;
banks;
legal advisors;
communication
public affairs teams

Before / After: The Impact of Strategic Due Diligence

Without Anticipated Strategic Due Diligence

late identification of risks;
deterioration of the timetable;
tension with the authorities;
unexpected conditions;
loss of deal certainty;
weakened transaction communications;
unanticipated political exposure.

With Anticipated Strategic Due Diligence

better visibility on risks;
stronger anticipation capacity;
more robust structuring;
preparation of institutional dialogue;
reduction of execution risks;
credibility
improved strategic credibility of the transaction.

An Integrated Approach with Legal and Financial Advisors

Relians works in coordination with:

law firms;
investment banks;
M&A teams;
investment funds;
strategy departments;
public affairs teams;
communications advisors.

Our role is not to duplicate legal due diligence.

We provide a strategic, institutional, and sovereignty-based analysis of the risks likely to affect the actual execution of the transaction.

What We Analyze Before the Market Detects It

In sensitive transactions, difficulties rarely appear at closing.

They generally emerge earlier:

during the first administrative exchanges;
during informal consultations;
at the stage of interministerial arbitrations;
during the review of the investor;
as a result of a geopolitical context;
when the transaction becomes an economic sovereignty issue;
or when the transaction begins to generate political risk.

Our approach is designed to identify these vulnerabilities before they become transaction risks.

Why Relians

For more than twenty years, Relians has advised on transactions exposed to sovereignty, economic security, and foreign investment screening issues in France.

The firm advises on transactions involving:

This approach makes it possible to integrate the State factor as an operational variable in transaction execution.

When to Act

Strategic due diligence is particularly useful:

before a binding offer;
before entry into exclusivity;
before an acquisition in a sensitive sector;
before an exposed minority investment;
before a cross-border transaction;
before a transaction likely to fall within the scope of foreign investment screening;
before any transaction likely to attract the attention of public authorities;
before an acquisition exposed to economic sovereignty risk.

The earlier the analysis is carried out, the greater the ability to anticipate, structure, and secure the transaction.

Speak with Relians

Are you considering a transaction exposed to sovereignty, foreign investment screening, or State risk issues?

Relians assists you in assessing the strategic feasibility, deal certainty, and execution risks of your transaction.

Possible Engagements

Flash Strategic Review;
full strategic due diligence;
FDI Risk Assessment;
pre-acquisition analysis;
strategic feasibility review;
strategic transaction advisory;
institutional coordination.

Assess the Strategic Feasibility of Your Transaction

Certain transaction vulnerabilities are visible neither in the accounts nor in the contracts.

They appear when the transaction enters the field of State risk, economic sovereignty, or foreign investment screening.

Relians assists investors and industrial groups in identifying the risks that may affect the actual feasibility and execution of a sensitive transaction.

Request a Confidential Strategic Due Diligence