Merger Escape Clauses Carry Little Value, Study Says

Law360, New York (November 8, 2012, 10:07 PM EST) -- Mergers and acquisitions lawyers who labor over elaborate closing conditions, breakup fees and other conventional safeguards against failed deals are wasting their time, according to a new study set to be published in the Cornell Law Review.

The report posits that buyers’ representatives would do better to focus on post-closing terms, already common practice for deals involving private companies.

An examination of nearly 500 acquisitions executed over the last 10 years shows that the chance of a deal falling through is so low that, contrary to...
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