It is important to protect your business when negotiating mergers and acquisitions, especially as the M&A boom continues post-pandemic. These are high-risk transactions which can harm the reputation of companies and cost billions. Security professionals need to be able to see the acquired companies to find any security weaknesses and minimize risk before the deal is concluded. Threat intelligence can be used to pinpoint the most vulnerable areas within the systems of both companies and make adjustments prior to the time of integration.
While some M&A deals are driven by financial reasons but the most successful deals require a more comprehensive approach to business and brand value. The most important aspect of this is the ability to comprehend how a company’s brand image is perceived by its customers and markets as well as the reputation of its executives. A solid M&A process is crucial to uncovering all this information and ensuring that the M&A is successful.
M&A agreements include a number of deal protection mechanisms. Included are termination fees, matching rights and locking up assets. While there was some opposition from the courts to these devices existed in the hostile takeover era, courts have been more inclined to accept their use since. The extent to which these devices boost the return to target shareholders depends on the motivations and the actions of the directors who agree with them and how they are implemented. This article suggests that when terms of an M&A agreement, such as termination fees and matching rights are carefully crafted to align the motivations of management and directors with the interests of their shareholders, it could increase the probability that a transaction will be assessed at fair market value.