Protect Business in Merger and Acquisition Deals

Protection of businesses in merger and acquisition deals is a major goal, particularly as M&A activity ramps up after the pandemic. These transactions are high-risk ventures which can result in billions of dollars and harm corporate reputations. Security professionals need to have complete visibility of the companies being acquired in order to spot security holes and mitigate risks before the deal is concluded. Threat intelligence can be used to determine the most vulnerable areas in the systems of both companies and make improvements prior to the integration process kicking off.

While certain M&A transactions are based on financial considerations, the most successful deals take a holistic approach to brand and business value. This includes the ability to comprehend what consumers and potential markets think of a brand’s image and the reputation of its executives. Having a strong M&A due diligence process is essential to discovering this information and making sure that the M&A is successful.

M&A agreements include a number of deal protection mechanisms. They include termination fees, matching rights and locking up assets. Although there was a lack of judicial support for these devices existed in the hostile takeover period, courts have become more open to recognizing them since. The extent to which they enhance the value of the shareholders targeted by the deal is contingent upon the motivations and behaviour of the target managers and directors who agree to them and the manner they are implemented. This article argues that when the conditions of an M&A deal that include termination fees and match rights – are carefully designed to align the motivations of the managers and directors with the interests of their own shareholders, they can dramatically increase the chances that a deal is appraised at a the advantages of using a data room for board meeting fair value.