Protect Business in Merger and Acquisition Deals

It is important to protect your business when in the process of negotiating mergers and acquisitions especially as the M&A boom increases after the pandemic. These are high-risk transactions that can sour the reputation of companies and cost billions. Security professionals must be aware of all aspects of the acquired companies to find any security weaknesses and reduce risk before the deal is completed. Threat intelligence can be used to identify the most vulnerable points within the two companies systems and provide recommendations for improvement before integration begins.

While certain M&A transactions are driven by financial factors but the most profitable deals take a comprehensive approach to branding and business value. This is the ability to determine what the target markets and customers consider a company’s brand and the reputation of its leaders. A solid M&A due diligence process is essential to uncovering this information and ensuring that the M&A is successful.

M&A agreements offer a variety of deal protection mechanisms. Included are termination fees, matching right and asset locking up. Although there was a lack of judicial support for these devices was evident during the hostile-takeover period, courts have become more willing to recognize them since. The extent to which these devices increase the value of shareholders who are targeted depends on both the motivations and the actions of the directors who are in agreement with them as well as the manner in which they are implemented. This article argues that when terms of an M&A agreement including termination fees and matching rights, are carefully crafted so that they align the interests of management and directors with the interests of their shareholders, it may increase the chance of a transaction being valued at fair market value.

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