Private equity brings new tactics to M&A

Author: Lizzie Meager | Published: 1 Dec 2015

Sellers are forcing buyers to bear the brunt of regulatory risks, and are adding increasingly aggressive terms to sale contracts as the M&A market goes from strength to strength.

Many of these tactics, including hell or high water clauses, break fees and certain funds, were first introduced by private equity firms looking for more certainty in transactions. As 2015 volumes approach a  record high, counsel say they are more widespread on both public and private deals.

"Sellers are becoming increasingly aggressive, and that means as a purchaser you need to establish the risks early on," said Mark Powell, a partner at White & Case speaking at IFLR’s Competition Law Forum last month. "A prudent purchaser is already identifying a remedy and how much it will cost before making an offer."

KEY TAKEAWAYS

As the M&A market gains traction again sellers are deploying increasingly aggressive...