In In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court answered some important questions about the standard of review applicable to conflicted transactions under Delaware law.  The first question relates to the application of the model used in Kahn v. M & F Worldwide Corp., commonly referred to as the “MFW framework.” In that 2014 case, the Delaware Supreme Court held that, instead of the more stringent “entire fairness” standard of review that would ordinarily apply in the context of mergers between a controlling stockholder and its ..read more

Delaware courts recently issued important decisions that impact M&A dealmakers and lawyers. In this post, we dive into two cases that serve as a reminder that Delaware grounds review of corporate actions in statutory requirements and not market practice, no matter how prevalent. In response, legislation to resolve the ambiguity created by these decisions has been approved by the influential Council of the Corporation Law Section of the Delaware State Bar Association and is expected to be introduced to the Delaware General Assembly for consideration during its 2024 regular session. Pending ..read more

The Hart-Scott-Rodino (HSR) Act thresholds that govern which mergers & acquisitions must be reported to the US Department of Justice (DOJ) and Federal Trade Commission (FTC) will increase slightly more than 7% in March 2024. To learn more about the changes to the Hart-Scott-Rodino (HSR) Act please see the recent client alert published by Cooley’s antitrust team ..read more

2023’s much-discussed downturn in mergers & acquisitions – with global M&A volume and value down 6% and 17%, respectively, from 2022 – was largely driven by the slowdown in the tech sector, with global tech M&A volumes down 51% year over year, while other sectors saw marked increases.[1] The headwinds in the tech M&A sector are generally reflective of two core trends: Higher interest rates – and parallel fear of further increases – led to plummeting and often volatile valuations across private and public markets for growth-oriented companies, with skyrocketing financing costs ..read more

As we look ahead to the 2024 proxy season (and beyond), let’s review the key 2023 trends and developments from activism playbooks, with a sharp focus on the ever-changing landscape in the technology and healthcare sectors. Momentum building for 2024? Globally, 229 campaigns launched in 2023, just under 2022 campaign levels, ushering in the most active two-year period on record.[1] Activism in Europe was a core driver of activity, representing 28% of all campaigns and a 30% increase from 2022.[2] Nearly three-quarters of activist campaigns in the US concentrated in core sectors of technology (2 ..read more

Cross-border M&A activity in 2023 was impacted by heightened geopolitical conflicts, high inflation and interest rates, and increased regulatory pressures as the global economy remained clouded by looming recession fears. Deal financing became more difficult and expensive, placing more emphasis on alternative funding and value creation. In such an environment, global M&A activity experienced a 17% drop in value from the previous year, plummeting to $2.9 trillion – representing a 10-year low. That figure also falls considerably short of pre-pandemic levels, with deal values hitting $4.1 ..read more

In a subdued year for global M&A, deal-making in the life sciences industry came in waves, with a busy fourth quarter generating cautious optimism heading into 2024. While the year saw an overall decline in M&A activity (down 17% from 2022), total pharmaceuticals and life sciences deal value in 2023 increased by approximately 50% compared to 2022. Why did life sciences outperform the market? The last quarter of the year ended with a surge of deal activity. For example, in the biopharma space, AbbVie, Bristol Myers Squibb, AstraZeneca, and Roche each announced multiple big-ticket acquis ..read more

As a capstone on the Biden administration’s aggressive 2023 antitrust enforcement, the Department of Justice (DOJ) and Federal Trade Commission (FTC) jointly issued revised Merger Guidelines before the holidays, replacing the Horizontal Merger Guidelines issued by the Obama administration in 2010 and the Vertical Merger Guidelines issued by the Trump administration in 2020. The 2023 Merger Guidelines reflect many of the aggressive and novel theories of harm that the DOJ and FTC have pursued under the Biden administration through enforcement actions and also enunciated in speeches. Co ..read more

On Friday, Corp Fin released some new CDIs relating to the proxy rules. The CDIs can all be found under the caption Proxy Rules and Schedule 14A, and all are new with one exception for a newly revised CDI under Rule 14a-6. Universal proxy is once again a hot topic, and there are three new CDIs on universal proxy to add to your collection. To learn more about these new CDIs please see the recent PubCo blog post ..read more

Compensation matters, including retention packages, equity treatment and related disclosure, are always key negotiating points in M&A transactions. In a challenging M&A market that is stifled by overall volatility and uncertainty, high interest rates, and reduced valuations, issues related to compensation may become more fraught as parties navigate alternative transaction structures and forms of noncash deal consideration. In this post, we discuss compensation challenges in M&A deals in a depressed market and how dealmakers can address these issues. Challenge #1: Managing equity in ..read more