June 6, 2018
European M&A Trends
CMS recently published its “10th annual European M&A Study.” Here are some of the study’s deal trends during 2017:
– Locked box was used in 25% of all deals across Europe and was particularly popular in larger deals;
– Earn-outs remained a popular feature, especially in Benelux, German-speaking countries and Southern Europe with longer earn-out periods and more turnover-based earn-outs than previously;
– Baskets and de minimis provisions were less frequent due to nominal liability caps in deals featuring W & I insurance making them redundant;
– W & I insurance usage is at an all-time high, especially in deals exceeding EUR 25m;
– Liability caps are getting lower, especially in the bigger European jurisdictions, mainly as a result of W & I insurance;
– Limitation periods are not getting any longer, with the majority operating in the one- to two year range;
– Security for warranty claims is less frequent than it was a decade ago, with escrow accounts being very much the favoured alternative when there is security;
– MAC clauses have never been rarer in Europe;
– Arbitration regained some of its popularity with a notable trend emerging in favour of international rather than national rules where applicable.
– John Jenkins