M&A transactions are governed by contracts that exhibit constrained variation ? they are negotiated, yet full of boilerplate, tailored, yet full of patterns and regularities.
This paper (a chapter of the Research Handbook on Mergers and Acquisitions, forthcoming) reviews the suite of contracts commonly needed in an M&A transaction, and offers two complementary descriptions of the core ?deal contracts? in M&A. The first tracks the customary organization of the contracts themselves, and the second re-analyzes their contents with a new, functional typology derived from the purposes of deal contracts: (1) specification (especially of deal structure, pricing terms, and, in partial acquisitions, the business to be acquired), (2) risk-sharing, (3) process management, (4) control and information sharing, and (5) dispute management. Each description is illustrated by examples from and links to recent, high profile deals, augmented with cross-sectional data from a representative sample of M&A contracts involving U.S. targets. Ways that ownership and regulation shape M&A contracts for U.S. targets are summarized, and data consistent with that summary is presented. Finally, the rapidly growing body of empirical research on the contents and effects of M&A contracts is surveyed. The paper concludes with a brief agenda for future research on M&A contracts.
In this essay, I discuss the rise and fall of regulatory competition in corporate insolvency law in the European Union. The rise is closely associated with the European Insolvency Regulation (EIR, 2002), and it is well-documented. The UK has...Read more
Regulatory arbitrage refers to structuring activity to take advantage of gaps or differences in regulations or laws. Examples include Facebook modifying its terms and conditions to reduce the exposure of its user data to strict European privacy...Read more
This article analyzes the impact of technology, in particular distributed ledgers/blockchains, smart contracts, Big Data analytics and AI/machine learning (collectively referred to as “Corporate Technologies”, or “CorpTech”) on the future of...Read more
Innovation is a contract intensive economic activity in a world of incomplete contracts. We show that trust mitigates incomplete contracting and enhances innovation by acting as an informal contracting mechanism, particularly in industries with...Read more