Why do acquirers outperform in a weak economy?

Why do acquirers outperform in a weak economy?
By Dr. Jens Kengelbach & Dr. Georg Keienburg & Mr. Jeff Gell & Mr. Jesper Nielsen & Dr. Maximilian Bader & Mr. Dominik Degen & Prof. Sönke Sievers

When economic downturns roil markets across the world and investors witness their returns diminish, dealmakers stand to benefit from downturns. Rather than retreating to the sidelines, dealmakers often reap significant returns from deals done in weak economies compared to returns from deals completed in strong market conditions.

This paper presents an analysis of the performance of strong- and weak-economy deals, comparing deals after two years from the time of announcement. Generally, the researchers distilled two key imperatives for....

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Managing spinoff transactions with a sophisticated tax overlay

Managing spinoff transactions with a sophisticated tax overlay
By Cathy Birkeland & Mark D. Gerstein & Ryan Maierson & Laurence J. Stein & Pardis Zomorodi & Alexa Berlin

To ensure the successful execution of a transaction for both SpinCo and RemainCo, both companies need to position the carveout to successfully operate as a stand-alone company.   

The authors of this paper look at the complex duties of care and loyalty that are unique to carveouts and consider the methods deal team should employ to structure this type of transaction, satisfy disclosure requirements, and ensure tax-free value creation through...

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New research compares M&A strategies and overall shareholder returns

New research compares M&A strategies and overall shareholder returns
By Mr. Jeff Rudnicki & Mr. Andy West & Kate Siegel

Companies that regularly pursue moderately-sized transactions generally outperformed peers, according to research conducted by the authors of this paper, which studied overall shareholder returns versus transformational deals.

The research showed the most successful companies are placing “multiple bets” and being “nimble with [their capital]” while making several acquisitions even...

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Cross-border M&A checklist for successful acquisitions in the U.S.

Cross-border M&A checklist for successful acquisitions in the U.S.
By Adam O. Emmerich & Robin Panovka

Based on current geopolitical and economic conditions, the authors of this paper provide a checklist of shifting M&A issues that practitioners should carefully consider in advance of an acquisition in the U.S. 

Recent changes, including the effect of lower corporate taxes in increasing the amount of cash that corporations can dedicate to debt reduction after an acquisition, have created more opportunities for profitable deals, whereas geopolitical tides and increased CFIUS scrutiny should be carefully considered before...

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Linking integration and financial metrics around synergy targets

Linking integration and financial metrics around synergy targets
By Mr. David W. Smalstig & Ms. Dawn White & Ms. Eileen Kamerick & Mr. Ken Kotylo

Frameworks for developing realistic synergy targets were debated during this session as the participants drilled into the interplay between term sheets and post-close operating dynamics, considered occasions for limited post-merger integration, contemplated variations in deals where there is a minority or venture investment, and considered approaches that may make a future divestiture feasible. 

Dawn White, Manager, M&A Integration - Corporate Development at Corning; Eileen Kamerick, Member, Board of Directors at AIG Funds, Associated Banc-Corp, Legg-Mason Closed-End Mutual Funds and Hochschild Mining; and Ken Kotylo, Vice President of Acquisitions & Corporate Development at Telephone and Data Systems (TDS) drilled into the interplay between term sheets and....

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