Trump Antitrust Appointees Finally Set: What to Expect

Leadership at the top of the Department of Justice Antitrust Division and Federal Trade Commission appears to be set – nine months into the Trump Administration – with the confirmation of Makan Delrahim as Assistant Attorney General at DOJ and the announcement of the intention to nominate Joseph Simons to […]

The Art of Drafting Milestones for an Earn-Out

Former stockholders of SARcode Bioscience were recently denied a claim that they were entitled to be paid $425 million in milestone payments under a merger agreement. The decision provides an anecdotal lesson in drafting milestones and suggests that the more technically prescribed milestones may be more difficult to meet, even […]

M&A Guide to CFIUS: How the Review Process Can Impact Your Transaction

Article 1 of 4 The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) has received much attention over the past several months for its role in blocking two separate Chinese acquisitions of US semiconductor companies. In September 2017, President Trump issued an Executive Order prohibiting Canyon Bridge Capital […]

M&A Lessons Learned from the Blocked Chinese Acquisition of Lattice Semiconductor

Last week, President Trump issued an Executive Order prohibiting the acquisition of Lattice Semiconductor Corporation (Lattice), a US computer chip manufacturer, by a Chinese investor. The president’s order blocking the transaction was based on a recommendation by the Committee on Foreign Investment in the United States (CFIUS), an interagency committee […]

Non-Competes for California Employees in M&A Deals: Don’t Fudge It

Post-employment non-compete covenants are generally invalid in California, with certain limited but important exceptions like when a business or associated goodwill is sold and the buyer – as part of the deal – wants to prohibit certain sellers from competing with their former business. Consequently, buyers of California-based businesses generally […]

DealLawyers.com Webinar: Cybersecurity Due Diligence in M&A

Over the past several years, cybersecurity issues have become prominent areas of emphasis for M&A due diligence. Post-signing revelations about cybersecurity breaches have had a disruptive effect on several high-profile transactions, and are likely to make buyers and sellers even more attentive to cybersecurity issues during the due diligence process. […]

Upcoming Event: Second Annual Symposium on Corporate Law at UC Berkeley

This two-day, multi-panel event will explore the development of corporate law, the evolving relationships between corporate stakeholders, M&A and what corporate lawmaking may look like in the future. Jamie Leigh will speak on a panel on “Trends and Developments in M&A Law” on October 27. October 26 – 27, 2017 […]

Martha Stewart Decision Draws Roadmap for Controller Sales to Third Parties

A transaction involving a controlling stockholder on both sides of the deal presents a clear conflict of interest that will result in heightened scrutiny under the “entire fairness” standard of review if later challenged. However, there is not always a conflict when the controller stands on just one side of […]

Chicago Bridge Reversal Reiterates Need for Consistent Accounting in Working Capital True-Up

The vast majority of private company acquisitions contain some type of purchase price adjustment to account for any changes in certain financial metrics (including working capital) of the target between a specified reference date (or target) and the closing date. For a variety of reasons (including the inability to predict […]

Regulatory Hurdles Facing Mergers With Chinese State-Owned Enterprises

Acquisitions by Chinese state-owned enterprises (SOEs) of companies in the United States (US) and European Union (EU) have grown in recent years. Trade and cross-border investment has increased and Chinese SOEs have extended their reach beyond their domestic market. Those acquisitions, together with joint ventures between Western companies and Chinese […]

Monetizing an Earn-Out – Does That Make It a “Security?”

In life sciences/medical technology transactions, buyers and sellers often use milestone-based and sometimes royalty-based contingent consideration to compensate sellers for assets that are in various stages of development from clinical- to development-stage to product commercialization.[1]  In licensing transactions, there is an established secondary market through which licensors may monetize their […]

New Pubcos Should Consider Defensive Health in Light of ISS/GL Recommendations

ISS and Glass Lewis are continuing to apply special scrutiny to certain corporate governance provisions of “newly public” companies (generally, companies that have gone public in 2014 or later). See our December 2016 client alert. In short, the latest policies (which have evolved over the last few years) provide that […]

When Approval for a Drug “Indication” Gets Murky: Drafting Milestones to Avoid Disputes

According to a recent study by SRS of recent private life sciences deals, disputes over earn-outs arose in about one-third (36%) of all milestones that were expected to be hit by September 2016.[1] While most disputes were not about contract interpretation issues regarding whether an event triggered the milestone or […]

$2 Billion Purchase Price Dispute Over GAAP Compliance Highlights Need for Careful Drafting

Purchase price adjustments are common features (2015 SRS study: 77% of deals) of private merger agreements that are generally intended to ensure that the acquired company will have the same level of cash or working capital to operate the business post closing that it had at signing. However, if not […]

2017 M&A Trends Series: Negotiating Anti-Reliance Language

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Negotiating Anti-Reliance Language Buyers continued to assert fraud claims in private […]

2017 M&A Trends Series: Appraisal Risks Factor High

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Appraisal Risks Factor High In deals where stockholders have the right […]

2017 M&A Trends Series: Delaware Confronts M&A Litigation

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Delaware Confronts M&A Litigation M&A deal litigation continues to plague most […]

SEC Announces Enforcement Action for Failure to Disclose Banker Fee Arrangements

On February 14, 2016, the SEC settled an enforcement action against CVR Energy for providing misleading disclosure about the fees payable to CVR’s two financial advisors in connection with CVR’s defense of a hostile tender offer by affiliates of Carl Icahn in 2012. The SEC did not impose any civil […]

2017 M&A Trends Series: Rep & Warranty (R&W) Insurance is Here

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Rep & Warranty (R&W) Insurance is Here Previously, transaction insurance (or […]

2017 M&A Trends Series: Uncertain Times Cast Focus on Deal Certainty

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Uncertain Times Cast Focus on Deal Certainty Public-target M&A deals and […]

2017 M&A Trends Series: Innovation Pressures Fuel M&A

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Innovation Pressures Fuel M&A The WSJ has written about the rise […]

2017 M&A Trends Series: The Trump Effect

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. The Trump Effect How President Donald Trump will shape the regulatory […]

2017 M&A Trends Series: Cautious Optimism in the New Year

So far this year, deal parties are approaching M&A with cautious optimism. Over the next few days, we will run a series of Cooley M&A blog posts with some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Cautious Optimism […]

Allergan Fined for Failure to Disclose Merger Negotiations with Third Parties During Hostile Bid

At what point do “discussions” with a friendly merger party become “negotiations” that are required to be publicly disclosed under the tender offer rules in response to a hostile bid? In a recent settlement of cease and desist proceedings against Allergan in connection with Valeant and Pershing Square’s well-publicized hostile […]

Antitrust 2017: Trends and Developments to Watch

1. Transition to a Trump Administration is top of the agenda President-elect Donald Trump’s DOJ and FTC transition team appointments and public short list of candidates to run the agencies indicate that antitrust enforcement in the Trump Administration will most likely mirror recent Republican administrations, which have tended to be […]

Data Points from Recent Appraisal Decisions

As concerns over the potential exercise of appraisal rights are increasingly being factored into deal price, data points from recent Delaware appraisal decisions may help inform a party of its appraisal risks and, if an appraisal claim is filed, may also be useful in deciding whether to settle the claim […]

Why we Expect Private Equity to Invest More in Tech in 2017

With all the analysis on domestic and international political events and their potential impact on M&A trends, it’s easy to miss that 2016 represented the continuation of a meaningful paradigm shift in private equity. With increasing frequency, traditional private equity investors are focusing on tech. Even in the relatively slow […]

ISS and Glass Lewis Update 2017 Proxy Voting Policies

Institutional Shareholder Services (ISS) and Glass Lewis (GL), the two most influential proxy advisory firms to stockholders of public companies, recently released updates to their voting policies in 2017, including updates to their policies on “newly public” companies that have adopted anti-takeover protection measures considered “adverse to shareholder rights.” Our […]

Corp. Fin. Posts New Guidance on Banker Fee Disclosure of Alternative Fees for Tender Offers

On November 18, 2016, the Staff of the Division of Corporation Finance issued two new C&DIs that address banker fee disclosures for tender offers on Schedule 14D-9. The new C&DIs clarify that disclosure is required of “all” material terms for compensation including the types of fees payable to the financial […]

Treatment of M&A Non-solicits and Employee Comp Diligence Under New Antitrust Guidelines

Last month, the FTC and DOJ issued a set of antitrust guidelines addressing certain employment and compensation practices that are most likely to occur in the high-tech and healthcare industries where highly-skilled employees are in demand.  Specifically, the guidelines clarify that an agreement among competing employers to limit or fix […]

Cybersecurity Diligence in M&A Transactions

Recently, in the midst of an M&A transaction involving Verizon and Yahoo!, news broke of a Yahoo! cybersecurity breach that had occurred approximately two years earlier. This event raised a lot of speculation around what effect the breach may have on the deal, including by how much it might change […]

Federal Antitrust Authorities Step Up Merger Enforcement – Recent Victories Buoy Enforcers

Obama Administration antitrust enforcers have faced criticism over the last year for not being sufficiently aggressive, allegedly leading to concentrated industries to the detriment of consumers. The Department of Justice and Federal Trade Commission appear to have responded by stepping up enforcement.The agencies’ efforts are bearing fruit. In just the […]

Federal Court Gives Teeth to Operational Efforts Covenant in Sanofi/Genzyme Earn-Out Dispute

We keep a close eye on developing cases regarding earn-outs and contingent payment rights in light of the prevalent use of these arrangements in life sciences deals and their increasing use in non-life sciences deals. On September 8, 2016, a federal court in New York declined to dismiss a claim […]

Court Gives Energy Transfer the Right to Walk Based on its Counsel’s Inability to Deliver the Required Tax Opinion

In a rare decision involving unusual facts, the Delaware Court of Chancery held that a buyer (Energy Transfer Equity, L.P.) had the right to terminate a signed merger agreement with its target (The Williams Companies, Inc.) that Energy Transfer no longer wished to close due to the unexpected decline in […]

Federal Appeals Court Rejects “Disclosure-Only” Settlement

Yesterday, in In re: Walgreen Co., the 7th Circuit Court of Appeals rejected a “disclosure-only settlement” involving Walgreen Co.’s 2014 purchase of Alliance Boots and the combined company’s subsequent reorganization. In a strongly-worded but divided opinion, the Court reversed the district court’s ruling, which approved (albeit reluctantly) the disclosure settlement […]

Webinar Recording: Compensation and Benefits Issues in M&A Transactions

Employee benefits and executive compensation issues rarely drive an M&A transaction. But these issues can result in unexpected delays and can make or break a successful post-closing integration of the companies. This webinar focuses on key employee benefits and executive compensation issues that should be considered by public companies in M&A […]

Shareholder Activism and HSR Collide: DOJ Obtains Record Fine from ValueAct

The Department of Justice Antitrust Division announced on July 12 that ValueAct Capital agreed to pay a record $11 million civil penalty to settle claims that ValueAct purchased over $2.5 billion in Halliburton and Baker Hughes stock with the intention of influencing their proposed $35 billion merger without complying with […]

Failure to Comply with the HSR Act: The Price is Going Up

Failure to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) is about to get a lot more expensive. Effective August 1, 2016, the maximum civil penalty for noncompliance with the premerger notification requirements of the HSR Act will increase from $16,000 to $40,000 per day – a […]

Dell Decision and Recent Amendments to Delaware’s Appraisal Statute

Section 262 of the DGCL provides a statutory remedy for stockholders who do not vote in favor of certain M&A transactions (generally cash mergers) to petition the corporation to buy their stock at a price equivalent to the “fair value” of the stock, subject to compliance with certain procedures. A […]

From Aeroflex to Trulia: A Seismic Shift

On January 22, 2016, Chancellor Bouchard rejected a proposed disclosure-only settlement in In re Trulia, Inc. Stockholder Litigation, 129 A.3d 884 (Del. Ch. 2016), marking the culmination of what has been a seismic shift over the past several months in the Delaware Chancery Court’s treatment of disclosure-only settlements in lawsuits challenging […]

CDX Holdings Decision Spotlights the Treatment of Stock Options in a Merger

The treatment of outstanding stock options and other equity compensation awards is often a key element of a sale transaction.  Because stock options can represent considerable value, how they are treated can have a significant impact on the company’s management team and employees.  For the parties negotiating the transaction, it can […]

DE Court Comments on Block-Holder Rights in OptimisCorp

The Delaware Supreme Court issued an Order this week in OptimisCorp v. Waite that could have implications for VC-backed or other companies with so-called “block-holder” directors – or directors who are appointed by a stockholder with a large block of shares – in the context of corporate turmoil where management, […]

Private Market Trends Snapshot 2016

M&A deal terms will almost always vary based on the specific context of the transaction, including the deal price, structure and each party’s negotiating leverage. Although no amount of data can replace context-specific analysis, data-driven decision-making continues to make its way into negotiations and can, under the right circumstances, provide […]

Federal Trade Commission v. Steris Corporation: High Barriers to Proving Likely Anticompetitive Effects from Loss of Future Competition

It has been more than 50 years since the Supreme Court first deliberated over the potential competition doctrine in United States v. Penn-Olin Chemical Co., where the Court recognized that Section 7 of the Clayton Act may be violated based on that theory of competitive harm.

Options to Acquire: How these Creative Acquisition Strategies Differ from a Traditional Purchase

Creative acquisition strategies are offering both buyers and targets additional opportunities to grow their businesses through M&A. One strategy that we are seeing parties use is the “option to acquire” structure, which addresses both the needs of a target company to develop a product or business on the one hand […]

Newly-Released Data Reveal 50% Increase in CFIUS Filings Over Prior Year

Each year, the US government releases a public version of a classified report to Congress summarizing the government’s confidential review of certain foreign investments in the United States. The entity responsible for the report is an obscure committee of federal agencies and offices with national security responsibilities. Collectively, the members of the […]

IFLR Asia M&A Forum 2016

Cooley is a sponsor of the IFLR Asia M&A Forum. This comprehensive two-day forum will provide attendees with key developments, best practices and tips for navigating unique deal-making environments in the region and bring together leading industry experts and counsel to debate top trends and the future of M&A in Asia. […]

Top 10 M&A Developments and Trends for 2016

Here is a look back at the top M&A developments that affected deal-making last year and a look forward to our expectations for 2016.

Revised 2016 Hart-Scott-Rodino Antitrust Thresholds

Filing thresholds under the Hart-Scott-Rodino (HSR) Act will increase by about 2.5%, effective February 25, 2016, raising the level that a transaction’s value must exceed to trigger a filing from $76.3 million to $78.2 million and making adjustments to the Act’s other key dollar thresholds.

What US GCs Should Know About Drafting International Arbitration Clauses

Thinking about what may go wrong with a contract, can be as important as the planning to make it go right.Key issues such as where an arbitration should take place, the level of confidentiality required and what levels of evidential discovery are you likely to require, can all put you in a much better position to deal with a dispute if one should arise in the future.