Acquiring a company means acquiring something qualitatively different from the sum of its assets or a certain number of shares. Acquiring a company means acquiring all legal relationships (active and passive) as well as envisaging a commercial future composed, in part, of intangible assets "attached" to tangible assets, but which, in themselves, are not objects of rights. Anyone working in this field knows that there are typical characteristics when acquiring: • An increase in the risks assumed by the buyer in the face of hidden responsibilities, • A delicate position of the directors or managers of the company whose capital is transferred, and • A succession of contractual phases of different intensity, linked in time, knowing that the moment when the contract is definitively signed never corresponds to the moment when the seller ceases to manage the assets sold. For all the above, there is no doubt about the importance of due diligence in order to determine the risks arising from any transaction involving an asset transfer. Legal due diligence makes it possible to know the various legal aspects of the company but also to verify the assumptions agreed with the seller and the commitments acquired by the company, to evaluate it, to verify its operations, etc. In each case, it is always necessary to adapt the scope and intensity of the due diligence to the size and importance of the transaction. However, the reality of any transaction always involves unknowns and unpredictable risks. Despite the best audits and due diligences, these unknowns remain long after closing. For this reason, negotiation documents reflecting the preliminary or final agreements of an acquisition inevitably contain a list of manifestations made by the seller on the most varied terms, formulated under the name of "Representations and Warranties" or "Manifestations and Warranties". Basically, this means that the seller communicates to the buyer a series of circumstances about the company or its environment and assures them that they are true. The warranty is about truthfulness, but the obligation assumed by the seller to ensure that these statements are true is not properly guaranteed, i.e. by a personal or real warranty. The effect of making such "declarations" is to allow the buyer to accumulate information under the protection of liability. In principle, when the seller ensures the existence of a certain state of affairs, he guarantees its existence and assumes responsibility for it. However, as Spanish case law demonstrates, it is very difficult for courts to admit a request for annulment when both parties are "professionals" companies, there is no imbalance in their negotiation power and the buyer has had the means to know the reality of the circumstances that are relevant to it. In addition, the negotiation of such "representations and warranties" is often a delicate deal. In this context, a solution exists to speed up the negotiation and offer security to both parties: W&I (Warranty and Indemnity) insurance, which aims to cover the financial consequences of claims resulting from the inaccuracy of the seller's representations and warranties in the acquisition contract. What does it involve? W&I policies can be subscribed by the seller or by the buyer, although we almost always deal with buy- side policies. In both cases, the policy aims to cover the breach of the Representations and Warranties by the seller while respecting the general principle of insurance "no profit or loss" since the purpose of the insurance is to reconstitute and/or restore the results, i.e. to restore the insured to the material and financial situation that he would have known without the loss, so without profit or loss. This insurance is a valuable tool because it allows you to spread the risks between sellers, buyers and insurers. For the seller, the insurance makes it possible to release part of the proceeds of the sale (reducing the deposits, guarantees, withholding taxes or contractual receivables provided for in the basic contract). The selling price is also optimized by playing with the competition (by offering better guarantees covered by insurance). For the buyer, W&I coverage may provide better protection, beyond the amount of compensation negotiated in the contract and/or for a longer term of coverage resulting from breaches of representations and warranties. This choice also allows you to maintain your relationships, especially when the seller and/or the management of the selling company are still present, after the transaction is completed. The buyer has direct recourse to the insurer rather than the seller. Finally, the payment of the premium is punctual, without renewal, it is paid at the time of the closing of the transaction. Our Firm brings together the lawyers involved in the legal aspects of the operation as well as the brokers responsible for obtaining the best insurance proposal for our client, in terms of price, coverage and execution. In this way, the Firm puts at your service the experience accumulated over more than 25 years in the development and support of numerous international industrial groups and companies present in Spanish territory. Thanks to its recognised experience, the Firm also benefits from long-term relationships of trust with the decision-making authorities of W&I insurers, making it possible to facilitate the placement of risks.