The CMS European M&A Study 2012 is a detailed analysis of over 1,350 European M&A deals that CMS has worked on between 2007 and 2011. It is a continuation of previous years’ CMS European M&A Studies which clients said had “real, substantial value”. The Study identifies what can be considered ‘market’ in European M&A.
Looking back over a turbulent five year period, there has been a steady reinstatement of pre-2008 standards with seller-friendly provisions such as lower liability caps, shorter warranty limitation periods and reasonably generous de minimis and basket provisions. In addition, the greater spread of locked box deals and growing acceptance of warranty and indemnity insurance (replacing seller’s warranty liability) provide structural downside risk for sellers to a greater extent than was the case even pre-2008. This is counterbalanced to some extent by some buyer-friendly trends. In 2011, there was a notable rise in securing non-compete covenants from sellers and a greater concern about obtaining security from the seller against warranty claims.
The Study looks at deal points that are usually heavily negotiated in M&A deals, including MAC (material adverse change) clauses, purchase price adjustments and warranties. The data is broken down by regions in Europe and provides quantitative and qualitative analysis of the trends in the UK, German-speaking countries, France, Benelux, Southern Europe and Central Eastern Europe. Where there are significant differences with M&A deal terms in the US, comparisons between Europe and the US are included.
Thomas Meyding, Head of CMS Corporate, says: “Clients continue to tell us how useful the Study is to them and we are pleased to once more present an update of the most comprehensive deal points study available in Europe. The specifics of the Study will continue to be extremely useful for both buyers and sellers involved in M&A transactions.”
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