This week we highlight a survey on current trends in cross-border M&A by the Brunswick Group. The survey polled more than 100 M&A lawyers, bankers and advisors across North America, Europe and Asia and found that leading dealmakers are optimistic that softness in cross-border M&A will soon reverse.
As part of the effort to rebrand the party and reconnect with working-class voters who were lost in the presidential election, congressional Democrats revealed a new populist policy agenda, titled “A Better Deal: Better Jobs, Better Wages, Better Future” (hereinafter, “A Better Deal”), on Monday, July 24. The agenda outlined by A Better Deal has three pillars: (1) creating jobs and raising wages and incomes, (2) lowering the costs of living and (3) building an economy that helps families conquer challenges of the 21st century. The agenda includes several sections that will be fleshed out further over the coming weeks. Those sections, including one titled “Crack Down on Corporate Monopolies and the Abuse of Economic and Political Power” that focused on increased antitrust enforcement, will often be accompanied by legislation.
This week we highlight two analyses, one by J.P. Morgan and the other by Ernst & Young, reviewing the 2017 proxy season. The reports address board diversity; gender equality; environmental, social and governance (ESG) issues; and the normalization of shareholder activism as high priorities and key trends for many investors and boards.
MergerMarket data shows that global deal activity in the first quarter of 2017 has so far remained resilient despite geopolitical uncertainty, with 3,554 deals worth $678.5 billion announced, representing an 8.9% increase in value compared to the first quarter of 2016 (4,326 deals, $622.9 billion).
The White House announced yesterday that Makan Delrahim will be nominated to head up the United States Justice Department’s Antitrust Division. Delrahim, a long-time D.C. attorney with decades of policy and lobbying experience, is expected to be confirmed, given his Hill connections and support from the antitrust community. He is currently a member of President Trump’s transition team and most recently worked to guide Supreme Court nominee Neil Gorsuch through the Senate confirmation process. Delrahim has been described as a conservative pragmatist who listens to all sides as he attempts to develop consensus, an approach he is expected to take in his new proposed role. We anticipate that his nomination marks a return to the Bush-era level of merger challenges (meaning that the Antitrust Division will still be active), but that the Antitrust Division is more likely to clear deals that create verifiable efficiencies and is more willing to remedy issues through divestiture than Delrahim’s predecessors in the Obama administration.
One of the typical activities for junior associates in performing due diligence for M&A and securities transactions involving public companies is going through the “exhibit list” filed by the public company on its recent registration statements and Securities Exchange Act of 1934 (the Exchange Act) filings and tracking down the material agreements listed. Today, that process usually entails reading that list and then scrolling through the public company’s EDGAR filings, trying to find the actual filing to which each such material agreement is attached. This process, often also performed by young associates in the investment banking and other investment fields, can be labor-intensive and not particularly intellectually challenging. Recently, however, the Securities and Exchange Commission (SEC) promulgated rules that will make this process much easier and faster for those hard-working young professionals.
On March 1, 2017, the SEC adopted amendments to various rules, including Item 601 of Regulation S-K, that will require most registrants to include a hyperlink to each exhibit listed in the exhibit index of these filings. To enable the inclusion of such hyperlinks, the amendments also require that registrants submit all such filings in HTML format.
Cree Inc. (“Cree”), the U.S.-based LED lighting and semiconductor company, announced last month that it is terminating its agreement to sell its Wolfspeed Power & RF division (“Wolfspeed”) to Infineon Technologies AG of Germany (“Infineon”) for USD $850 million. The decision to terminate the deal came shortly after Cree announced that CFIUS raised objections to the acquisition and that the parties were working within the deal structure to mitigate CFIUS’ concerns. This outcome underscores that CFIUS risk can exist in transactions involving buyers from countries that are closely allied to the United States.
This week we highlight KPMG’s audit committee survey findings on challenges and priorities in the year ahead. It’s hardly surprising that most audit committees point to risk management as the top challenge, given expectations for slow growth and economic and political uncertainty in the US and around the world, technology advances and business model disruption, cyber threats, continued regulatory scrutiny, and investor demands for transparency.