M&A disputes to explode as complex transaction structures and changing economic conditions define booming market, new study from BRG finds
EMERYVILLE, California., December 1, 2021 / PRNewswire / – Berkeley Research Group (BRG) has released the results of its M&A Litigation Report 2021, which presents quantitative and qualitative research providing insight into the global M&A litigation landscape. As the M&A market has remained extremely strong in 2021 and is expected to remain so next year, the data provides insight into the factors driving an increase in litigation. These factors include innovative transaction structures, new investment vehicles, technological advancements and rapidly changing economic conditions.
BRG’s inaugural effort from 2020 focused specifically on the Asia-Pacific region (APAC). This year’s report offers a global perspective, adding data and insights from Europe, the Middle East and Africa (EMEA) and North America, as well as APAC, and delves into recurring themes while proposing new questions and discoveries.
The report includes a quantitative survey of 225 attorneys, private equity professionals and corporate finance advisors, and presents insights from more than 15 of the world’s top lawyers working in mergers and acquisitions, litigation, and corporate finance. capital investment. External contributors are from leading companies such as Akin Gump, Wachtell, Lipton, Rosen & Katz and Latham & Watkins, to name a few.
The main takeaways from this year’s report are as follows:
- The sectors most affected by litigation – hotels and leisure, life sciences and technologies – are the same from one region to another.
- Disputes often arise in complex cross-border transactions that trigger many jurisdictions; however, some markets, including China, South Korea and the United States, are considered historically more contentious.
- The increase in the number of Special Purpose Acquisition Companies (SPACs) in the M&A arena appears poised to lead to more litigation.
- The growing number of private equity deals continues to change the M&A landscape, especially in the way disputes arise and are resolved.
- Material Adverse Change (MAC) and Material Adverse Effect (MAE) clauses are popular, but not overwhelmingly popular, ways to guard against post-close litigation.
The report examines the new issues COVID has presented, leading to potential disputes over purchase price adjustments and earn-out calculations. BRG’s research also examines another potentially powerful change: the MAC, MAE and force majeure clauses. Terms that were once mere boilerplates are getting a closer look, and trends such as third-party financial audits are becoming a bigger factor in how transactions take shape.
“In an era of increasingly complex mergers and acquisitions, the findings of this report clearly demonstrate that a multidisciplinary approach, grounded in an understanding of the fundamental issues at stake and the root causes of disputes, is crucial to getting to the bottom of individual disputes, “said BRG CEO Mustafa Hadi.
Download a copy of the BRG 2021 M&A Litigation Report.
Berkeley Research Group, LLC is a global consulting firm that helps leading organizations advance in three key areas: Litigation & Investigations, Corporate Finance, and Performance Improvement & Consulting. Based at California With offices around the world, we are an integrated group of experts, industry leaders, academics, data scientists and professionals working across borders and disciplines. We leverage our collective expertise to deliver the inspired ideas and practical strategies our clients need to stay ahead of the game. Visit thinkbrg.com to learn more.
SOURCE Berkeley Research Group, LLC