Akin Gump has issued an alert on administration and congressional activity since President Trump’s inauguration. The report highlights key regulatory and legislative developments across a range of policy areas. This document also previews the policy agenda for the coming year and concludes with a political update and analysis of the 2018 congressional elections.
Strategic planning should continue to be a high priority for directors in 2018. In an increasingly competitive and evolving marketplace, coupled with a domestic economy growing at a low single-digit rate, stagnation is tantamount to failure, and singular reliance on organic growth is effectively a bet on poaching market share from rivals. In almost all industries, a company’s chances for success, survival and growth are dependent on accretive acquisitions. This is especially true in certain sectors, including health care and technology, as rapid consolidation and vertical integration in these industries continues. Boards will continue to struggle with the balance between achieving short-term results and/or otherwise using cash resources to satisfy calls by investors with an appetite for immediate gratification versus deploying capital to invest in longer-term growth opportunities that involve additional risk. Board discussions and decisions about capital deployment, risk tolerance and strategic plans are, and for the foreseeable future will continue to be, complicated by the unexpected continued low-interest-rate environment, which has enabled companies’ access to debt at historically low rates. Boards should expect to face mounting pressure to take advantage of the low-rate debt to finance share repurchases at the same time they consider potential acquisitions that could be financed with cheap debt.
Akin Gum recently covered two important rulings made in Delaware courts in December that provide critical guidance to corporations and their boards. On December 14, 2007, the Delaware Supreme Court issued its opinion in Dell, Inc. v. Magnetar Global Event Driven Master Fund, Ltd., Case No. 565, 2016, the latest in a series of noteworthy “appraisal arbitrage” cases that made their way through Delaware Chancery Courts in 2017. For the second time in 2017, the court reversed a Chancery Court’s decision to assign little or no weight to deal price in appraisal cases, leaving some confusion as to whether or not deal price should be the default standard absent mitigating factors. Learn more by reading the client alert here.
This week we highlight Deloitte’s M&A trends report, which surveys 1,000 executives at corporations and private equity firms for their take on M&A activity in 2017 and their expectations for 2018. The results are clear, with respondents overwhelmingly predicted a strong year for M&A activity ahead.
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).