M&A strategy and process shifts considered during three-day virtual M&A Summit

M&A strategy and process shifts considered during three-day virtual M&A Summit
By William Jefferson Black

Throughout the Intralinks Virtual M&A Summit there was a consensus that the functioning of the financial markets makes this period different from the 2008-2009 economic decline.

Nonetheless, dealmakers are strained to evaluate M&A as the highest and best use of capital, if valuation declines make this an opportune time to approach targets, and whether to continue inflight deals.

A recommendation, that was echoed by many of the participants, was to consider more structured tools for...

Read more

Study on M&A value creation shows high level of divestiture activity

Study on M&A value creation shows high level of divestiture activity
By Mr. Les Baird & Mr. David Harding & Mr. Andrei Vorobyov & Ms. Shikha Dhar

Divestitures represented almost two-thirds of strategic deals, by value, during the past decade.

The authors of this study, from the consulting firm Bain & Co., look at divestitures as opportunities to release, “the time, talent and energy tied up in nonstrategic businesses”.  They also point to the freeing of capital for higher growth pursuits as they study companies that use divestitures more often.

Their research on M&A value creation over the past two decades shows that...

Read more

Tailored poison pill structures fortify defenses against hostile threats

Tailored poison pill structures fortify defenses against hostile threats
By Mr. Douglas N. Cogen & Mr. David K. Michaels & Mr. Ethan A. Skerry

Companies facing volatility may need to evaluate their existing corporate structural defenses and consider whether to prepare or adopt a stockholder rights plan, or “poison pill”, according to the authors of this timely paper.

To improve the prospects of a positive market and judicial review, defensive measures will likely need to be considered within their jurisdiction’s fiduciary framework and...

Read more

Modifications to merger review procedures may cause significant delays

Modifications to merger review procedures may cause significant delays
By Mr. Bill Batchelor & Mr. Andrew L. Foster & Mr. Kenneth B. Schwartz & Mr. David P. Wales

The global spread of the coronavirus has disrupted merger review procedures, as the authors of this paper explain. Dealmakers should expect delays in the antitrust review of notified transactions and material extension of prenotification reviews, with some non-U.S. agencies refusing to accept formal notifications.

Only a limited number of countries’ competition authorities have fully suspended activities, closed or announced an automatic suspension of review deadlines; additional suspensions are likely as the...

Read more

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....

Read more