Fairness Opinion

A fairness opinion is an independent expert statement that assesses whether the financial terms of a planned transaction are appropriate ("fair") from the perspective of a particular party. It is prepared by a neutral investment bank or specialised adviser and is often addressed to the management board, supervisory board or shareholders who have to decide on a transaction.

The fairness opinion relies on recognised valuation methods, such as the DCF method, comparative analyses using multiples and analyses of comparable transactions. As a result, it confirms whether the offered price lies within a plausible range. It does not make a recommendation on whether the transaction should proceed, but assesses solely the financial fairness.

Fairness opinions mainly serve to protect decision-makers against liability risks and create transparency for shareholders. They complement the company valuation and are an important element of professional M&A advisory, especially in transactions with several stakeholders.