Avoiding IP pitfalls that can sink M&A deals

In most M&A transactions, intellectual property (IP) and intangible assets are core value drivers. Brands, technology, data, software, know-how and licences often constitute a significant portion of a target’s enterprise value. Global investment in intangible assets reportedly exceeded $10 trillion in 2025, growing 3.6 times faster than tangible investment since 2008.

One would imagine that, given the substantial value of IP assets in many M&A transactions, buyers would pay special attention to IP due diligence. However, IP-related risks are one of the most underestimated hazards in the M&A process. Failure to properly identify and mitigate these risks can result in adverse outcomes ranging from an inability to realise the full value of the acquired IP, to infringement of third-party rights and payment of damages.

This article highlights three of the most critical types of IP-related risks in the M&A context: valuation risk, infringement risk and the risk of being unable to commercially exploit IP.

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