DealLawyers.com Blog

This Wachtell memo discusses ten trends in shareholder activism to keep an eye on for the upcoming year. Here’s what the memo has to say about M&A-focused activism:

M&A remains a persistent theme of activism. The returns from operational improvements are generally less attractive to activists than the prospect of an immediate transaction premium. Over the last few years, however, a challenging regulatory and macroeconomic environment limited activists’ ability to credibly push for full-company sales or strategic carve-outs. With the significant M&A rebound in 2025, we expect activists to increase their focus on event-driven M&A outcomes. While pushing for full-company sales will remain a key objective for many activist campaigns, we also expect to continue to see activists arguing for break-ups that purportedly shed underperforming divisions or capitalize on trading multiple arbitrage for different businesses.

The memo suggests that companies that want to consider potentially transformative M&A in a more deliberate fashion may consider establishing a strategic review committee that includes one or more activist-nominated directors. It stresses that while such a committee may make sense in particular situations, deciding whether to sell or break up the company should remain a full board decision, and the committee’s authority should be appropriately limited.

– John Jenkins