JKL, Inc.

Immediate Impact:Take-or-pay agreements obligate the company to take delivery of goods/services or pay a penalty. These agreements can have significant financial implications upon divestiture.

Financial Commitments:Reviewing these agreements first helps understand immediate financial obligations and liabilities that will impact the supply management function.

Divestiture Process:Identifying and managing these commitments is crucial during the due diligence process to ensure a smooth transition and avoid unexpected costs.

References:Due diligence best practices in supply chain management (e.g., Deloitte and EY reports) emphasize the importance of reviewing binding financial agreements like take-or-pay contracts during divestitures.