Trade Secrets and Due Diligence


  • This topic has 8 replies, 4 voices, and was last updated 8 months ago by Anonymous.
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    Samantha Maraj

    Given that due diligence normally takes place prior to the final closing of the deal, to what degree would the target company disclose trade secrets, business processes or proprietary technology that could be competitive advantages to the buyer? Wouldn’ there be the risk that the deal could fall through and the buyer could possibly take advantage of this information in developing similar or competing technologies/products/proceses?

    Patryk Kania

    I agree that while NDAs are in place, people continue to discuss broad topics beyond the DDC which makes it difficult to draw the line.

    Markus Gustafsson

    If the acquirer is in the same business, I believe it is of great importance not to disclose too much sensitive information until the signing of the deal is very close.

    Meshal Alshammari

    Control of such sensitive information is a topic I’ve always wanted to know about. perhaps, the main control comes from the resulting products of such discussions. if similarities are found, a case could be opened in court to investigate such similarities. at which point NDA would come into play as supporting documents for the case being made.


    I would agree that the buyer will likely to take advantage of “trade secret” in the event the deal failed through though NDA might have signed especially those horizontal merger or acquisition. Sometime it is difficult to prove “the trade secrets” are being used. I would think the seller has to exercise due care in delivering the trade secrets and only do this when the deal is very like and nearly finalised or even can condition in such a way the the “trade secret will only be delivered upon completion of deal.

    Fahad AlQahtani

    It is very critical if the discussion is between two competitors or seller and buyer are within the same sector. I believe secrets and sensitive info should not be disclosed early in the discussion and NDA should not be the only protection measures.

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