Our M&A lawyers are among the most experienced and effective in the world. We represent many of the world's largest publicly traded and privately held companies, as well as leading private equity firms on their most important mergers, acquisitions and takeover transactions.
2011 Review of Selected U.S. Strategic M&A Transactions
Practices
February 23, 2012
We are pleased to attach the 2011 edition of our annual study of selected U.S. strategic mergers. As with past issues, we examine the terms of the largest 25 non-financial U.S. merger transactions to see if we observe any interesting trends. In addition, for this most recent edition, we extended the period covered to include all of 2011 and also expanded the study to examine the top ten U.S. mergers involving non-U.S. acquirors.
2012 dealmaking has so far experienced a slow start, but we believe that, subject to the uncertainty associated with an election year, deal flow should increase as the credit and equity markets regain their footing. Possible trends for 2012 include the following:
- We expect increased M&A activity to be driven, at least in part, by private equity funds seeking to realize returns as they plan to raise new funds in 2013 and 2014 and ahead of possible changes in the U.S. tax laws affecting capital gains. There is also reason to believe that, as large corporations continue the trend of streamlining their operations, spin-offs and, in the alternative, divestitures through strategic sales will continue.
- Although overall U.S. M&A activity slowed towards the end of 2011, many of the largest U.S. deals nevertheless were announced at the end of the year. As the credit markets continue to stabilize, both strategic and financial buyers will be able to access financing, resulting in the slow but certain return of larger deals (perhaps even one or more megadeals) in 2012. Also, while our survey indicates that the use of financing conditions is in decline, we believe that financing considerations continue to play a key role and drive more creative provisions, such as reverse break fee payments in the event of a financing failure.
- Although the global M&A market has recovered more slowly than the U.S. M&A market, we believe that cross-border transactions will continue to play an increased role in both sectors. Acquiring an existing U.S. business remains an efficient method for non-U.S. firms to gain access to the U.S. market, and vice versa.
- Antitrust and other regulatory review of M&A transactions increased in 2011, and we believe that this trend will continue in 2012.
- Shareholder litigation in the M&A context continued to increase in 2011, and 2012 shows no signs of being any different. With Delaware courts aggressively reviewing the process leading to transactions, it is clear that dealmakers must be more diligent in managing the transaction process to make sure transactions withstand challenges.
We hope you find the study to be of interest.