Synthetics: A new approach to M&A in energy and infrastructure?

W&I insurance is frequently used as a tool in energy and infrastructure transactions to facilitate clean exits for sellers whilst providing the requisite warranty protection to buyers. In the past few years, synthetic W&I insurance has been developed, initially, from use in distressed M&A to increasingly being used in a non-distressed M&A scenario.

We weigh up the potential benefits and downsides in the use of synthetic W&I insurance to explore how it might facilitate a shift in approach to energy and infrastructure M&A, particularly where clients are acquisitive and have their own in-house or developed form of SPA they are comfortable using.