Paul Weiss recently published the November issue of its “M&A at a Glance,” which provides data on M&A transactions during the month of October 2025. Here are some of the key takeaways:
– In October, total deal values gained in the United States and globally, driven by the announcement of several strategic megadeals. Although deal counts fell by 49% in the United States and 36% globally, total deal values were still up 7% and 22%, respectively. In comparison, sponsor activity was down in the United States and globally by both total deal value and total deal count. Year-over year trends were similar.
– Computers & Electronics was the leading U.S. industry for M&A, topping the charts by deal value and count for October and over the last twelve months (LTM).
– Of U.S. public deals announced in October: Average reverse break fees (RBFs) were 5.4%, slightly lower than the 5.9% LTM average. Both financial and strategic buyer RBFs were slightly below LTM averages. 14% of deals had a go-shop provision (including half of the sponsor deals announced). 8% of deals were hostile or unsolicited, compared to 12% for the LTM.
Last year, I blogged about the NFL’s decision to allow its franchises to seek investments from a group of approved PE sponsors. Since then, teams like the Patriots, Giants, and 49ers have obtained significant investments from private equity and other investors. When you add in the record-breaking sales of pro sports franchises like the Boston Celtics, the LA Lakers, and the Washington Commanders, it’s become clear that pro sports teams are becoming an important asset class for M&A transactions.
In recognition of this development, this recent Cooley memo addresses some of the key challenges that buyers face in structuring investments in and acquisitions of professional sports franchises. Some of these challenges include:
– Debt and security limits. League rules often limit the amount of debt that a team can use to finance the acquisition of a team, and generally do not permit team assets to serve as security for such acquisition financing. Typically, these debt limits are in the hundreds of millions of dollars and are far short of the amount needed to meaningfully finance the acquisition of a team valued in the billions of dollars.
– Limits on number of owners and minimum size of investment. League rules often limit the number of individuals (e.g., 25) who can be an owner in a sports team and further require that each owner must own at least a minimum percentage (e.g., 1%) of a team to qualify as an owner.
– Limits on institutional ownership. While participation by institutional investors is generally permitted across the major American sports leagues, most leagues limit the amount of equity that institutional investors and sovereign wealth funds can hold in a team (generally between 15% and 30%, depending on the league).
– Fitness for ownership. Further limiting the sources of capital available for a potential buyer are league rules concerning the suitability of a prospective investor as an owner. The leagues tend to require extensive background checks, obligate owners to provide capital to the franchise as and when required to cause the relevant teams to be operated in a first-class manner, and to indemnify the sports league and its affiliates, often on a joint and several basis.
The memo addresses some of the unique transaction structures that have evolved in order to address these challenges, most notably multistep structures allowing the transfer of franchise ownership to be completed over time. It also addresses the protections for both buyers and sellers that are often included in these deals to respond to the default and other risks presented by transactions with deferred closings.
While the Trump administration’s approach to M&A antitrust review and enforcement has been somewhat more relaxed than what dealmakers encountered during the Biden administration, there still have been more than a few curveballs from antitrust regulators that parties have had to address. These include regulatory scrutiny of ESG & DEI programs, a more active industrial policy demonstrated by the use of tariffs, and the US government’s decision to take investment positions in companies in strategic industries.
A panel including representatives of H/Advisors Abernathy, King & Spalding and Jenner & Block at the recent Ray Garrett Corporate & Securities Law Institute provided some recommendations on how to successfully navigate this environment. This excerpt from an H/Advisors Abernathy memo summarizing the panel’s discussion shares some of the panelists’ insights:
Have a plan to get ahead of likely issues. The transactional nature of this administration, and the hot topics on which they are focusing, should not come as a surprise. The Trump administration, and many Congressional Republicans, campaigned on these commitments. They told voters what they would do and now they are following through with promises. Self-audit your workplace and culture (i.e. DEI and ESG) programs, review prior disclosures and public statements, understand what motivates your regulators and representatives.
Plan for today’s new media landscape. For deals under regulatory scrutiny, the battleground today still includes The Wall Street Journal, Financial Times, the wires and New York Times, but the terrain has shifted. Leaders and their staffs are turning more often to podcasts, newsletters and partisan or niche outlets driving messages on social media. Think differently and with creativity so you are directly reaching decisionmakers where they are now, not where they have traditionally been.
Engaging with Congress can be an opportunity. Too many companies choose to be too reactive in engaging with Congress. On large transactions, now, that assumption is frequently a mistake. Recently, Congress has demonstrated a track record of influencing change at organizations of all sizes. It is prudent to assemble to team of lobbyists, lawyers, and communicators to educate, build relationships where they don’t exist, and provide a political strategy, as appropriate. Having this deep bench can help deter, deflect or at least better inform investigative activity. In an M&A context, Members of Congress have proven to be effective at influencing perception in the White House and among agency leadership.
In dealing with Congress, the memo advises that companies keep in mind the priorities of their various audience. For example, Senators focus primarily on impacts to their states, while House Committee leaders focus on national issues – and regulators and members of the majority are very concerned about the online reaction to high-profile issues and how that’s reflected back to them through their constituents.
The latest development in the DExit debate is Coinbase’s announcement that it will reincorporate in Texas. Stockholder approval was already received by written consent, and the company filed a preliminary information statement on Wednesday. That same day, the WSJ ran an op-ed penned by Paul Grewal, Coinbase’s CLO, “Why Coinbase Is Leaving Delaware for Texas.”
Even just due to the company’s size and name recognition, this move is a notable one. I also thought it was interesting that one of the reasons given in the information statement is the nature of Coinbase’s business and how the State of Texas is approaching digital assets. I haven’t seen industry-specific factors like this commonly cited as a reason to reincorporate.
Texas’ Public Support for Blockchain and Crypto Innovation. The State of Texas has firmly established itself as a national leader in digital asset adoption—viewing crypto not as a niche experiment, but as a cornerstone of its economic future. With clear rules, a supportive pro-innovation government, and world-class energy and technology sectors, Texas has earned recognition as one of the most crypto-friendly states in the nation.
State lawmakers have enacted legislation formally recognizing digital assets under Texas commercial law, providing clarity and confidence for innovators and investors alike. Governor Greg Abbott and other state leaders have consistently demonstrated steadfast support for blockchain and cryptocurrency innovation. Most recently, Texas created a Strategic Bitcoin Reserve—one of the first-of-its-kind state-managed fund designed to hold Bitcoin and other eligible digital assets.
Texas is also home to a thriving blockchain ecosystem, including one of the largest concentrations of Bitcoin mining operations in the world. Industry leaders and advocacy organizations continue to work closely with policymakers to ensure Texas remains at the forefront of forward-looking crypto policy and sustainable innovation.
Preemption rights — provisions in cooperative agreements that give one party the option to buy the other’s interest before it can be sold to a third party — often give rise to disputes. This Debevoise alert cites Chevron’s acquisition of Hess as an example of a parent-level transaction delayed by over a year because of a dispute regarding preemption rights contained in the joint operating agreement of a significant asset. Given the risk of unintended consequences, the alert provides practical tips for drafting preemption rights that work as intended — including to prevent them from “interfering with large-scale transactions, parent-level M&A or IPOs.” The first tip is an existential one:
Weigh the costs and benefits of including a preemption right in the first place. Parties should bear in mind that preemption right provisions are reciprocal and have inherent costs to all parties involved. In particular, because preemption rights can restrict the transfer or sale of a given asset, they can impact not only its marketability but that of the associated businesses. At the same time, preemption rights have discrete benefits, most notably in affording joint venture partners some control over their collaboration partners.
When included, it recommends that the provision be very clear about:
– when the preemption right is triggered, including precise definitions of “transfer” and “change in control”;
– the types of transactions, if any, that are carved out from its scope;
– what happens if the preemption right is triggered, including how the stake would be valued, the timeline for exercising the right and other procedural steps; and
– a clear and efficient dispute resolution mechanism in case there is a disagreement.
It also says you need to anticipate the impact on certain transactions, especially ones at the parent level:
An asset-level preemption clause can complicate larger deals up the chain of ownership if it is not properly limited. For example, parties may wish to exempt transactions where the asset in question represents only a small percentage of the value of the overall transaction. Parties might also consider bespoke carve-outs that contemplate a specific future transaction. For example, parties sometimes choose to carve out IPOs or ultimate parent level transactions from the preemption right, so that a company can go public or undertake a corporate merger without triggering preemption rights across its portfolio of agreements at the asset level.
A few years ago, John shared a blog by Glenn West on choice-of-law and choice-of-forum provisions in which Glenn noted that, “a properly-worded choice-of-law clause can, in most instances, ensure that the contractually chosen law” will be applied to two kinds of “contractually-related disputes” — “traditional breach of contract claims, as well as tort-based claims such as fraud and negligent misrepresentation.” Earlier this week, in Cytotheryx Inc v. Castle Creek Biosciences Inc. & Paragon Biosciences LLC (Del. Ch.; 11/25), the Delaware Chancery Court easily concluded that a broad choice-of-law clause contained in a merger agreement did indeed apply to tort claims, but had to look a bit closer at whether the choice-of-law provision covered the particular tort claims at issue.
The Merger Agreement’s choice-of-law provision provides that Delaware law will apply to “all claims and causes of action based upon, arising out of or in connection []with” the Merger Agreement. That language—particularly “arising out of” and “in connection []with”—is “paradigmatically broad.” Indeed, the question of whether a choice-of-law provision applies to torts has turned on whether the contract contained similar language. When the contract does not, Delaware courts have held the provision does not apply. The implication, borne out by though not always explicitly stated in the case law, is that when a choice-of-law provision does contain this broad language, it does cover tort claims. Here, the Court holds that the Merger Agreement’s choice-of-law provision is broad enough to cover at least some tort claims.
The tort at issue in the case was not fraud or negligent misrepresentation (or fraudulent inducement, which Sitting Vice Chancellor Winston gave as an example of a tort that “necessarily arises out of a contract”), but defamation. Plaintiffs contend that “extending the choice-of-law clause to defamation claims is a bridge too far.” Sitting Vice Chancellor Winston found that a defamation claim does not “necessarily” but “possibly” arises out of a contract.
She found that the claims at issue in the dispute were encompassed by the merger agreement’s broad choice-of-law provision since they concerned statements related to performance of the merger agreement — specifically about contractual obligations, “misrepresentations” during the “acquisition process” and “refus[ing] to provide payment.” But she notes: “Had Cytotheryx and Swart made statements about some other topic, the result might be different.”
“In a market in which attractive assets draw fierce competition, smart buyers are finding ways to stand out through value creation rather than higher prices.” This Goodwin alert focuses on creative strategies that can position a buyer for success “without inflating headline prices or up-front equity requirements” at a time when competition among prospective acquirers is particularly intense.
One way buyers can do that is by viewing the transaction — and the tax implications in particular — through the sellers’ eyes.
In founder-backed businesses and lower middle-market deals, significant asymmetries may exist between the buyer’s and seller’s tax structuring sophistication. Rather than leaving sellers to navigate these complexities alone, successful acquirers engage experienced advisers and apply creative thinking to maximize a seller’s value.
Here are some specific examples:
The QSBS Opportunity: For US corporate business, qualified small business stock (QSBS) represents particularly fertile ground for value creation. Sellers may unknowingly hold QSBS without understanding its potential benefits. . . . Buyers that demonstrate creativity and flexibility around QSBS, as compared to competitors presenting “take it or leave it” structures, can build goodwill that extends far beyond “found money” for sellers. Investing resources in understanding a seller’s unique tax position signals a buyer’s commitment to partnership that helps earn a seller’s trust.
Additional Tax-Driven Differentiators. Beyond QSBS, several approaches can distinguish buyers:
– Partnership structures enabling go-forward equity incentives treated as profits interests rather than stock options, providing capital gains treatment on incentive equity to sellers who continue with the business
– Flexibility on pre-closing taxes, including seeking and transferring pre-closing income tax refunds as and when received or pursuing expedited refunds (so called “quickie” refunds) for estimated tax overpayments for the current taxable year
– Holistic seller needs assessment, addressing charitable giving goals or estate planning requirements through meaningful engagement with sellers’ advisers
In a follow-up to this piece, Goodwin explains how buyers can also better position themselves by demonstrating that they’re “the right next owner and partner for sellers.”
Programming note: In observance of Veterans Day, we will not be publishing a blog tomorrow. We will be back on Wednesday.
This recent Weil article (p. 6) reviews Northern Data AG v. Riot Platforms, (Del. Ch.; 6/25), a recent Delaware Chancery Court’s decision sorting out various purchase price adjustment disputes, and uses that case to develop a list of best practices to avoid these disputes. This excerpt lays out some of those best practices:
– Process, process and process again. Work closely with accountants and financial advisors at all times throughout purchase agreement negotiation and drafting. Align in advance on process timeline, especially in fast-moving transactions, to permit advisors time to review drafts of the relevant provisions.
– A detailed model of the EV-to-equity bridge is key. Some definitional components of a purchase
price calculation may leave room for interpretation – a detailed model forces deal teams and financial advisors to wrestle with the language in the contract leading to a better process.
– If the parties differ in level of sophistication, consider including a detailed sample calculation marrying each line item to its purchase price definition as an exhibit to the purchase agreement. But be clear about whether the exhibit is binding or included for illustrative purposes only.
The article also recommends paying close attention to how accounting metrics used to calculate and adjust final purchase price are defined and considering a cap on purchase price adjustments – particularly in situations where varying interpretations of accounting concepts could result in significant swings in the amount an adjustment.
This recent article from Nasdaq’s Center for Board Excellence discusses the insights provided by a panel of experts on shareholder activism during a recent webcast on post-proxy season trends in activism. Panelists included Avinash Mehrotra, Co-Head of Americas M&A and Global Head of Activism & Raid Defense, Goldman Sachs; Marc Goldstein, Head of U.S. Research, Institutional Shareholder Services (ISS); Lori Keith, Board Member, e.l.f. Beauty, Portfolio Manager & Director of Research, Parnassus Investments; and Gabriella Halasz-Clarke, Head of Governance and Sustainability Solutions, Nasdaq.
One of the topics addressed by the panel was how to navigate common activist demands. This excerpt from the article summarizes their advice:
To stay ahead of potential interventions, boards should be able to anticipate activist demands and prepare strategic responses. Three common areas of activist focus include:
1. Return of Capital
Activist Demand: Activists may argue that a company is hoarding cash and that the excess should be returned to shareholders via increased dividends or share buyback programs.
Board Strategy: Regularly review cash management strategies to ensure they align with short-term and long-term objectives. Clearly communicate capital allocation rationale to shareholders to preempt misconceptions or activist criticisms.
2. Business Simplification
Activist Demand: Activists may claim that a company with multiple lines of business lacks strategic focus and efficiency. They often push for restructuring or divestiture of non-core assets.
Board Strategy: Thoroughly evaluate business units for strategic fit and performance. Consider divestiture where appropriate to streamline operations and unlock value.
3. M&A Activity
Activist Demand: Activists scrutinize M&A strategies—especially if execution falters.
Board Strategy: Continuously assess market dynamics to identify opportunities and threats. Articulate to shareholders how M&A aligns with corporate strategy.
The article says that including these topics into the ongoing boardroom dialogue will permit directors to provide swift and strategic responses to activist initiatives that aligned with the board’s long-term vision.
According to Dykema’s “2025 Mergers & Acquisitions Outlook Survey,” dealmakers are fairly upbeat about the prospects for increased M&A activity during the upcoming year. Here are some of the findings:
– When asked whether they expect their company or one of their portfolio companies to be involved in a deal over the next 12 months, the majority of respondents said yes. Acquisitions led the way, with (69%) anticipating activity, followed by joint ventures at (52%), and sales at (50%). These figures reflect a notable uptick from 2024, when (61%) expected acquisitions, (47%) anticipated joint ventures, and (46%) projected sales.
– There’s still plenty of economic uncertainty out there, with respondents citing general economic conditions (42%) and financial market conditions (32%) as the top two factors posing obstacles to deal activity in the next year. Tariffs emerged as a significantly greater concern in 2025, with 30% of respondents identifying them as a key obstacle to dealmaking—up sharply from just 8% in 2024. Company valuations (29%) and availability of quality targets (22%) are also key factors.
– In response to macroeconomic conditions, respondents report shifting their M&A strategy to focus on strategic acquisitions and to mitigate economic uncertainty and the impact of tariffs. When we asked survey participants how their approach to dealmaking has evolved this year, their open-ended responses revealed a clear theme: caution, selectivity, and adaptability.
– 83% of respondents believe PE investors will boost deal volume in the coming year, and 76% expect due diligence to remain a top priority.
– A majority of respondents expect to work on deals involving ESG risk screening in the next year, highlighting its growing role in M&A strategy. Meanwhile, 62% anticipate increased use of R&W insurance, though most expect only a modest rise. Just 4% foresee any decrease in usage.
The survey was conducted in August and September 2025 and contains insights from 216 M&A professionals, including executives, attorneys, bankers, and private equity leaders.