March 12, 2010
OK, so it's neither a merger nor an acquisition, but the Lehman "autopsy" is a good read. The entire set (multiple volumes) is available at Jenner & Block's website: here. I think it will take me quite a while to read - being more than 2,000 pages long - but that's okay I have a good idea how the story ends. Don't we all?
March 11, 2010
More Comcast/NBC Hearings Today
The Senate Commerce Committee is having more hearings on the Comcast/NBC deal today at 10:00am. Chirstine Varney (head of the DOJ's anti-trust division), Brian Roberts (CEO of Comcast), Prof. Christopher Yoo (UPenn Law) are among those on the witness list. The webcast will be available here.
March 10, 2010
Poor Ben. He Had No Choice...
Poor Ben. He may have made good ice cream back in the day, but he sure doesn't know the law. And he probably should have paid for better lawyers - Vermont lawyers, not those fancy ones from NYC. From a story about balancing corporate social responsibility with duties to shareholders on NPR yesterday:
[Ben & Jerry's] Co-founder Ben Cohen thought the company could better protect its social mission if it stayed independent. But he says the law was on the side of shareholders.
"The laws required the board of directors of Ben & Jerry's to take an offer, to sell the company despite the fact that they did not want to sell the company," Cohen says. "But the laws required them to sell the company to an entity that was offering an amount of money far in excess of what the stock was currently trading at."
"I think most people that are sitting on a board are not willing to lose their house for the privilege of sitting on that board," Cohen says.
And so they sold to the highest bidder. That helped set the stage for today's young, idealistic companies.
First, although it might not have been that obvious in 2000, it was probably still pretty clear that "just saying no" would have been a viable strategy - particularly for a company that had dual-class stock, a classified board, and required 2/3 of shareholders to vote against a director to remove him/her from office.
a) A director shall discharge his or her duties as a director, including the director's duties as a member of a committee ... (3) in a manner the director reasonably believes to be in the best interests of the corporation. In determining what the director reasonably believes to be in the best interests of the corporation, a director of a corporation ... may, in addition, consider the interests of the corporation's employees, suppliers, creditors and customers, the economy of the state, region and nation, community and societal considerations, including those of any community in which any offices or facilities of the corporation are located, and any other factors the director in his or her discretion reasonably considers appropriate in determining what he or she reasonably believes to be in the best interests of the corporation, and the long-term and short-term interests of the corporation and its stockholders, and including the possibility that these interests may be best served by the continued independence of the corporation ...
Thanks for the offer, Unilever. We've considered it carefully. However, consistent with our fiduciary obligations under Vermont law as directors we believe that accepting your offer would not be in the best interests of the corporation, the economy of the state, region, or the community. We believe the best interests of the corporation are best served by Ben Jerry's remaining an independent corporation with a soul. So, thanks, but no thanks.
March 9, 2010
More on Earnouts
March 8, 2010
The century of the (volatile) emerging market?
I’ve been blogging a lot about cross-border M&A, mostly covering Indian conglomerates purchasing firms outside of India. Emerging markets are not just experiencing outbound deals, there is also a lot of interest by western firms in acquiring targets in these markets. According to recent data by Thomson Reuters, 34% of deals announced thus far in 2010 involved a target or an acquirer (or both) in an emerging market. For example, just last week Prudential PLC, the British life insurance and asset management company, announced a $35.5 billion deal to purchase AIG’s Asian assets. The deal would fundamentally transform Prudential, making it a major player in the Asian insurance market.
These cross-border deals represent an important shift in deal-making and M&A activity. This is pretty exciting stuff especially given the overall decrease in M&A activity in the west. But cross-border M&A deals in emerging economies can also be somewhat thorny for deal makers. As articulated in this recent article “while optimism toward emerging-market deals is palpable, and the macroeconomic signs are positive, the reality for deal makers may not be so rosy. Deals in emerging markets often run into surprises like onerous government intervention or corporate management that, at the last minute, changes terms or tactics.”
Cross-border deals involve social, political, cultural and economic sensitivities that require sophisticated deal makers and counsel. For example, due diligence may involve an investigation into deal risks that are not always common in domestic deals (FX issues, political instability, etc.). Lawyers advising clients on emerging market M&A deals will need to be nimble and creative in their thinking, and have an understanding of the macro-economic and political environment beyond the typical domestic deal. Moreover, they must be ready to ask tough questions to which there may not be easy answers. It is not just the diligence process that is different. Deal documents will often look quite different from those used in typical domestic deals. I think some of the interesting questions for scholars and practitioners to investigate are whether, how and why deal documents differ, and to study the extent to which parties entering into acquisition deals in countries that seem to have very different legal rules nevertheless tend to develop roughly similar solutions to the characteristic problems that arise in acquisition transactions.