What is the primary goal of conducting due diligence in a merger process?

The primary goal of conducting due diligence in a merger process is to uncover potential risks. Due diligence involves a thorough investigation and analysis of the target company's business, financials, legal obligations, and operational practices. This process is essential as it helps the acquiring organization identify any issues that may affect the valuation of the target company, including financial liabilities, legal challenges, or operational weaknesses. By understanding these risks upfront, the acquiring party can make informed decisions about the merger's feasibility, structure, and potential contingencies that should be negotiated in the deal.

The other options, while relevant to the merger process in different contexts, do not capture the essence of why due diligence is performed. Drafting legal documents is a necessary task following due diligence but does not encompass the risk assessment aspect. Boosting employee morale may be a concern during a merger, but it is not the purpose of due diligence. Similarly, finalizing the acquisition stage comes after due diligence has been completed and any identified risks have been assessed and addressed. Therefore, the focus of due diligence firmly lies in uncovering potential risks, making the correct answer accurate and significant in the context of mergers.