Fiduciary duties typically require one to act in the best interests of their beneficiary, even if those interests may conflict with their own. This can present issues when part of the consideration for an acquisition is contingent on the future performance of the target, otherwise known as an “earn out.” If the buyer completely controls…
Tag: Mergers & Acquisitions
The Delaware Chancery’s Unique MAE Ruling
In the recent decision of Akorn Inc. v. Fresenius Kabi AG, et. al., C.A. No. 2018–0300–JTL (Del. Ch. Oct 1, 2018), Delaware’s Chancery Court held, for the first time, that, because a corporation violated a “material adverse effect” clause of a merger contract, the purchasing company could forgo its obligation to buy the target company.1 …
Will Big Blue’s New Red Hat be a Good Fit?
On October 28, 2018, IBM announced its plan to acquire software developer Red Hat for $34 billion in cash. If the deal goes through, it will be the second largest in industry history1 and the largest deal in IBM’s 107 years of operation.2 This announcement continues a tremendous winning streak for mergers and acquisitions. The…
The Failed Merger Between FanDuel and DraftKings
The professional sports industry has proven to be a hotbed of innovation for companies seeking to capitalize on its immense fan base. One of the most rapidly developing platforms in this space has been daily fantasy sports (“DFS”). Unlike traditional fantasy sports, where “leagues” comprised of typically a dozen members compete throughout an entire sports…
Time Warner and AT&T: Lengthy Regulatory Review Process Ahead?
AT&T Inc. has proposed an $85.4 billion acquisition of Time Warner Inc. to create a media and communications powerhouse.1 AT&T hopes to capitalize on combining Time Warner’s library of premium entertainment content with its expansive distribution network.2 However, the acquisition has drawn significant scrutiny and faces a stringent regulatory approval process. The Wall Street…
AMC and Carmike Cinemas to Merge
AMC announced this week its plans to buy fellow movie theater Carmike Cinemas1. The $1.1 billion deal will create the largest movie theater in the United States2. The deal, according to Wang Jianlin, AMC’s controlling shareholder, essentially boils down to a $30 per share cash offer, which represents a 19% premium over Carmike’s market price…
The SEC’s clarification to the unbundling rule and what it means for corporate inversions
Rule 14a-4(a)(3) of the Exchange Act of 1934 requires that the form of proxy “identify clearly and impartially each separate matter intended to be acted upon.”1 Rule 14a-4(b)(1) further requires that the form of proxy provide separate boxes for shareholders to choose between approval, disapproval or abstention “with respect to each separate matter referred to…
Visa Plans to Repurchase Visa Europe
On Monday, November 2, Visa announced its plans to acquire its former European Unit, Visa Europe Ltd., for as much as $23.3 billion.1 The main objectives of the deal are to increase Visa’s international reach and to compete with MasterCard, its main competitor, who is already integrated in Europe.2 The two companies were previously one…
Financial Times Acquired by Japan’s Nihon Keizai Shimbun in One of the Biggest Newspapers Deals Ever
On July 24th, 2015, the top officials of Nikkei, Japan’s largest media company, announced that the company has become the new owner of a prominent global newspaper, the Financial Times.1 The news came as a surprise to many, as senior executives of the FT and its parent company, Pearson, had been in negotiation with a…
HP to Grow Networking Business Through Aruba Networks Acquisition
In its first major transaction since announcing plans to split itself into two last year, Hewlett-Packard agreed to buy Aruba Networks on March 2, 2015.1 The deal, which is expected to close in the second half of this year, is valued at $3 billion, or $2.7 billion net of cash and debt.2 Aruba Networks, based…