With a more active M&A market, it is no surprise to report that sellers are taking less risk in private M&A sale and purchase agreements. It has been moving in that direction since 2011 as the market has been recovering from the financial crisis, but now we see definite signs which are pro-seller.
There has been a change in behaviour relating to earn-outs during 2014, particularly in Northern Europe. There are more earn-out deals and a greater conformity about the length of earn-out periods and the basis of earn-outs.
As ever there are regional differences. France still has the lowest liability caps but long warranty periods. CEE sees the most MAC clauses and arbitration is the likely dispute resolution mechanism. The UK remains wedded to de minimis and basket provisions although interestingly seller’s liability caps in the UK seem to be higher than in other regions. Deals in German-speaking countries seem to occupy the middle ground on most issues as far as risk allocation in Europe is concerned. We continue to see similar trends in all or most of the European regions rather than on an individual basis...
Please get in touch with us, to
- Request a copy of the Study, or
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Experts
Dr Thomas Meyding
T +49 711 9764 388
thomas.meyding@cms-hs.com
Dr Maximilian Grub
T +49 711 9764 322
maximilian.grub@cms-hs.com
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