Sellers taking on less risk in European M&A says CMS report

Sellers in European M&A deals faced less risk in 2014 as the region saw a major uplift in M&A deal value, according to a study by CMS, Europe’s largest legal services organisation.

In its seventh annual review of M&A, CMS analysed over 2,400 of its non-listed European public and private company deals between 2007 and 2014. 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 and Eastern Europe. Where there are significant differences with M&A deal terms in the US, comparisons between Europe and the US are included.

CMS’ study indicates that the deal environment for sellers across Europe is back to pre-financial crisis levels. Two particularly notable pro-seller trends are the significant use of locked-boxes and warranty and indemnity (W&I) insurance.

Stefan Brunnschweiler, partner and Global Head of the CMS Corporate/M&A Group, said: “The risk to sellers in European M&A deals has seen a steady decline over the last few years. However, 2014 saw a marked increase in seller-friendly deal structures, in line with the relative boom in M&A value across Europe.”

Please get in touch with us, to request a copy of the Study, or speak to one of our experts. We can slice and dice the data to make the findings of our analysis highly relevant to your own M&A situation.