M & A

A New Approach to Contract Formation in Preliminary Acquisition Negotiations and Agreements

By Joseph Franco August 13, 2024 by renholding

Columbia Law School Professor Allan Farnsworth once confidently asserted that common law contract “doctrines, imaginatively applied, are both all that are needed and all that are desirable” to protect participants in preliminary contract negotiations and agreements (what I refer to …

Contractual Remedies in Mergers: Lessons from Crispo v. Musk

By Dhruv Aggarwal, Albert H. Choi and Geeyoung Min July 22, 2024 by renholding

What remedy should a target be entitled to get from a breaching buyer in a merger transaction? This seemingly straightforward question has surprisingly vexed M&A practitioners and judges over the years.

With a public target, the buyer typically promises to …

Arnold & Porter Discusses Delaware Decision on Whether Soft-Earnout “Promises” Are Fraud or Puffery

By Thomas Yadlon and Tracy A. Belton July 15, 2024 by renholding

When a portion of the purchase price in an acquisition is contingent on the earnings or other performance metric(s) of the acquired business post-closing (i.e., an “earn-out” provision), buyers and sellers routinely discuss their aspirations and expectations regarding the go-forward …

Skadden Discusses FTC-DOJ Request for Information on Serial Acquisitions and PE Roll-Ups

By Tara Reinhart, Ken Schwartz, Mike Sheerin, Dave Wales and Julia York June 10, 2024 by renholding

On May 23, 2024, the Federal Trade Commission (FTC) and Antitrust Division of the Department of Justice (DOJ) jointly announced a request for members of the public to provide information that the agencies can use “to identify serial acquisitions and …

Goodwin Procter Discusses Add-On Acquisitions in Private Equity

By Jim Moriarty, Gregory Cage and Victoria Woodward June 4, 2024 by renholding

Over the past several years, sponsors have increasingly relied on add-on acquisitions to increase the value of their portfolio company investments. As EBITDA and revenue multiples on larger platform acquisitions increased through 2021 and into the early part of 2022, …

Sullivan & Cromwell Discusses New IRS Ruling Policy on Spin-Off Transactions

By M. John Jo, Jameson S. Lloyd, Stephen J. Profeta and Davis J. Wang May 20, 2024 by renholding

On May 1, 2024, the IRS and the Department of the Treasury issued Rev. Proc. 2024-24 (the “New Rev. Proc.”), which establishes revised standards for taxpayers seeking private letter rulings on tax-free spin-offs, focusing in particular on, among other things, …

Skadden Discusses CFIUS Proposal to Expand Its Authority, Tighten Time Frames, and Boost Penalties

By Brooks E. Allen, Brian J. Egan, Michael E. Leiter, Tatiana O. Sullivan and Sruthi Venkatachalam May 15, 2024 by renholding

On April 15, 2024, the secretary of the Department of the Treasury, as chair of the Committee on Foreign Investment in the United States (CFIUS or Committee), published a notice of proposed rulemaking (Proposed Rule) to expand CFIUS’ investigation and …

Should Companies Announce Reviews of Strategic Alternatives?

By Jenny Zha Giedt May 13, 2024 by renholding

A company’s announcement that it is undertaking a “review of strategic alternatives” is Wall Street code for exploring a potential sale or merger. Though no transaction may occur, the announcement signals that the company is due for a shake up, …

Paul Weiss Discusses Merger Guidelines Featured in FTC Handbag Case

By Andrew C. Finch, Scott A. Sher, Aidan Synnott, Thomas Rucker and Mark R. Laramie May 7, 2024 by renholding

• The FTC recently sued to block Tapestry’s proposed acquisition of Capri, alleging that the effect of the combination of the companies’ handbag brands may be to substantially lessen competition.
• The complaint relies heavily on the December 2023 FTC-DOJ Merger Guidelines

…

Skadden Discusses Seventh Circuit Decision on Mootness Fees in Lawsuits Challenging Mergers

By Marcie Lape (Raia), Chuck Smith and Lauren Sexton May 3, 2024 by renholding

The U.S. Court of Appeals for the Seventh Circuit in Jorge Alcarez, et al. v. Akorn Inc., et al.¹ mapped out one means by which a court may evaluate mootness fees paid to individual shareholders after the voluntary dismissal …

Private Equity’s Neglected Pre-History: A Trans-Atlantic Perspective

By Marc Moore May 1, 2024 by renholding

Large-scale private equity buyouts, and the increasingly gargantuan financial firms that spearhead them, are commonly regarded as staples of today’s financialized corporate economy. However, this has not always been the case and, up until recently, private equity firms and funds …

Sullivan & Cromwell Discusses Changes to UK Takeover Code

By Jeremy Kutner, Ben Perry and Matthew Triggs May 1, 2024 by renholding

On April 24, 2024, the UK’s Panel on Takeovers and Mergers (the “Panel”) published a consultation paper which proposes to narrow the scope of the companies to which the City Code on Takeovers and Mergers (the “Code”) applies.

The Code …

Skadden Discusses Proposed DGCL Amendments’ Impact on Stockholder Agreements, M&A Practices

By Allison L. Land, Edward B. Micheletti and Lauren N. Rosenello April 24, 2024 by renholding

On March 28, 2024, the Council of the Corporation Law Section of the Delaware State Bar Association (DSBA) approved proposed amendments to the Delaware General Corporation Law (DGCL) in order to align the DGCL’s provisions with current market practices following

…

Sullivan & Cromwell Discusses Delaware Supreme Court Ruling on MFW’s Application to Controller Transactions

By Eric M. Krautheimer, Melissa Sawyer, Matthew A. Schwartz, Matthew L. Strand and Mimi Wu April 12, 2024 by renholding

In the important 2014 case of Kahn v. M & F Worldwide Corp., the Delaware Supreme Court held that freeze-out mergers, in which a controlling stockholder takes a company private, are subject to Delaware’s heightened “entire fairness” standard of …

Cleary Gottlieb Discusses How Merger Safe Harbor for Sherman Act Violations Punishes Innocent Acquirers

By Heather S. Nyong'o, Jeremy J. Calsyn and Joseph M. Kay April 5, 2024 by renholding

In March 2024, the U.S. Department of Justice (“DOJ”) revised its Justice Manual to include a new safe harbor for acquiring companies that self-report criminal conduct by an acquired company identified in due diligence (the “Safe Harbor”).  When the Safe …

Arnold & Porter Discusses OCC, FDIC Policy Statements on Bank Merger Scrutiny

By Robert C. Azarow, James P. Bergin, David F. Freeman, Jr., Amber A. Hay, Michael A. Mancusi, Sonia Kuester Pfaffenroth, Kevin M. Toomey, Anthony Raglani and Trevor Kirby April 1, 2024 by renholding

In recent months, the U.S. banking regulators have proposed policy statements focused on providing greater insight on the agencies’ review of bank mergers and acquisitions under the Bank Merger Act (BMA).[1] On January 29, 2024, the Office of the …

Davis Polk Discusses FDIC’s Proposed Statement of Policy on Bank Mergers

By David L. Portilla, Luigi L. De Ghenghi, Randall D. Guynn, Eric McLaughlin and Margaret E. Tahyar March 28, 2024 by renholding

The Federal Deposit Insurance Corporation (FDIC) released a Proposed Statement of Policy on Bank Merger Transactions (the Proposal) that outlines the FDIC’s views on its jurisdiction and expectations with respect to each statutory factor under the Bank Merger Act (BMA).…

How Technology Investment Drives Community Bank Consolidation

By Cheng Jiang, Jonathan Scott and Zhaowei Zhang March 26, 2024 by renholding

From 2011 to 2019, the number of bank charters fell by nearly one-third, from 7,357 to 5,177, with community banks accounting for three-quarters of this decline (FDIC Community Bank Report, 2020) In a new paper, we presents compelling …

Death by a Thousand Cuts: The Hostile Bids Regime in Europe, 2004-2023

By Luca Enriques and Matteo Gatti March 25, 2024 by renholding

In 2004, the European Union (EU) adopted the Takeover Directive, a framework statute aimed at regulating corporate control transactions and takeover bids targeting EU listed issuers. The Directive, amidst aspirations of fostering a unified market for corporate control and ensuring …

Arnold & Porter Discusses Delaware Chancery Ruling in Microsoft-Activision Blizzard Deal

By Andrew Varner, Joel I. Greenberg, Steven Kaplan and Alice Lin March 19, 2024 by renholding

On February 29, the Delaware Chancery Court declined to dismiss claims that the process followed in obtaining board and stockholder approval of the merger of Activision Blizzard, Inc. with a subsidiary of Microsoft failed to comply with the requirements of …