A Professional Review of Legal Due Diligence Practice in Nigerian Mergers and Acquisitions Transactions

Legal due diligence is a foundational component of mergers and acquisitions transaction structuring in Nigeria, yet the scope, depth, and professional standards applied in Nigerian M&A due diligence practice vary significantly, creating transaction risk and post-completion litigation exposure. This study provides a professional review of legal due diligence practice in 20 completed M&A transactions in Nigeria between 2020 and 2023, spanning banking, telecommunications, manufacturing, and energy sectors. Data were collected through structured interviews with 25 M&A lawyers in Lagos and Abuja, and analysis of due diligence report structures, disclosure schedules, and post-completion dispute records. Results indicate that legal due diligence scope in Nigerian transactions is frequently compressed by deal timelines, leaving material risk areas inadequately investigated, particularly in areas of environmental liability, labour claims, and regulatory compliance. Disclosure letter practice is underdeveloped compared to English and South African M&A standards, reducing seller accountability for pre-completion issues. Indemnity provisions are rarely tailored to identified due diligence risk findings. The study concludes that M&A due diligence practice in Nigeria would benefit from professional standards guidance and recommends the Nigerian Bar Association Corporate and Commercial Law Committee publish a Nigerian M&A Due Diligence Best Practice Guide, mandatory completion accounts with agreed accounting standards, and enhanced disclosure letter training for transaction lawyers.

Keywords: legal due diligence, mergers and acquisitions, transaction risk, disclosure letter, Nigeria