M&A Social Covenants: Legal Promises Or Moral Commitments?

Law360, New York (April 8, 2016, 4:44 PM EDT) -- With the return of acquirer stock as a featured form of consideration in many recent deals, deal makers are once again focusing on "social" issues in striking a merger agreement. As compared to most straight cash takeovers where price garners the overwhelming share of, if not exclusive, attention, an acquisition featuring stock consideration, and especially a so-called merger of equals, often involves significant discussion between the parties of softer issues, including governance, board composition, management, people and corporate identity (e.g., corporate and brand names, headquarters and facility locations, and charitable and community commitments). A number of deal developments over the last few years highlight some of the risks and considerations unique to these social terms....

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