Background
Completing the environmental due diligence assessment of 185 operating sites in 37 countries in just eight weeks to help Ford Motor Company in the divestiture of its Volvo Cars Corporation division.
Our Approach
A global team of over 150 ERM specialists was involved in completing the environmental due diligence needed for prospective bidders of the Ford Motor Company’s (Ford) Volvo Cars Corporation (VCC) division.
Working to a tight schedule of just eight weeks, the environmental due diligence activities included:
- Desktop Reviews;
- Phase I Environmental Site Assessments (ESAs);
- Limited Compliance Reviews; and
- Environmental Liability Assessment and cost estimate for material issues.
We also categorized each of the 185 operating sites as to their potential for environmental impacts. The categorization process involved interviewing on-site personnel and conducting internet searches. Full Phase I ESAs and Limited Compliance Reviews were carried out on the 52 industrial/commercial sites. Desktop Reviews were conducted on the remaining sites.
The desired level of due diligence was agreed with both Ford and VCC from the outset and all project related correspondence was transmitted via Ford’s virtual data room. Once reports were finalized, an Environmental Liability Assessment was produced for each material environmental issue discovered during the due diligence as well as the probability that such costs would be incurred.
The project was managed from the US with project managers across Asia and Europe. Report deliverables were reviewed in accordance with ERM’s internal QA/QC policy by both the office local to the site and by the overall project management office in the US. This ensured technical accuracy and consistency.
Benefits and Value
- ERM completed the due diligence ahead of schedule and below budget. This enabled Ford to provide prospective bidders with information more quickly and to potentially speed up the timing of the deal.
- Our liability assessment allowed prospective bidders to obtain likely case costs associated with potential liability of material issues, identified as part or our deliverables.
- Daily updates were crucial in the overall success of the project and the global footprint of our Transaction Services practice and our understanding of complex environmental issues and regulations allowed us to meet Ford’s expectations and tight timeline.
- Based on responsiveness by both ERM and Ford, the environmental due diligence process ran smoothly with few surprises. The project enhanced the business relationship between ERM and Ford and puts Ford in a better position to plan future acquisitions and divestitures.