Deal delays due to extended antitrust merger reviews were a hallmark of the Biden administration’s skeptical – and sometimes outright hostile – approach to M&A. According to this recent McDermott Will newsletter, that’s changing, and the agencies are emphasizing the importance of getting out of the way of deals that don’t raise significant issues:
Consistent with the current, more business-friendly attitudes of the FTC and DOJ toward dealmaking, the two agencies also are making efforts to allow nonproblematic mergers to proceed more quickly. The FTC has brought back the practice of granting early termination of the Hart-Scott-Rodino (HSR) waiting period, a practice the FTC suspended under the Biden administration. FTC Commissioner Holyoak has stated that requests for early termination will help reduce the workload of FTC staff and help parties close transactions more quickly.
Since restarting the early termination program, the FTC has granted more than 100 early termination requests. Assistant Attorney General (Antitrust Division) Gail Slater has stated that the DOJ has been looking for other ways to speed up the merger review process, as well. FTC Chair Ferguson said that the FTC “must get out of the way quickly” when a merger would not violate antitrust laws, to avoid bogging down innovation and interfering with the free market. These statements stand in contrast with the approach of Biden administration enforcers, which was to try to slow down dealmaking generally.
Aumni and Fenwick recently released their latest “Venture Beacon,” a periodic report on the state of the venture capital market. This one covers the first half of 2025, and this excerpt highlights some of the survey’s key findings:
– Data through the first half of 2025 reinforces early-stage resilience amid late-stage decline. Seed through Series C rounds demonstrated strong performance in Q2 2025, with deal sizes growing 5 to 22% and valuations rising 3 to 60% quarter-over-quarter, while Series D+ rounds experienced sharp declines of 8.9% in capital raised and 48% in pre-money valuations, reflecting reduced mega-round activity at later stages.
– Seed rounds are evolving structurally, likely to bridge extended fundraising timelines. Seed deals continued to outperform later-stage financings in H1 2025, with companies raising larger Seed rounds. The data suggests traditional stage definitions are evolving as Seed rounds increasingly adopt characteristics historically associated with Series A financings. Further, the Seed to Series A graduation pipeline improved significantly, with 21% of Q2 2023 Seed raises in Aumni data successfully going on to raise a Series A within the following two years, from 12% the prior quarter.
– AI premiums persist despite shifting market share. Artificial Intelligence companies maintained strong valuation premiums across multiple sectors at Series A, though AI representation across funding stages has plateaued or declined in H1 2025. AI companies in the aggregate have taken a lower share of total funding allocation in the first half of 2025 compared to 2024, with the exception of Series D+ rounds.
– Secondary markets stabilized with improving sentiment. While secondary transaction volume remains at pre-pandemic levels, 28.9% of H1 2025 secondaries traded at premiums to recent equity rounds. The average secondary tranche size remains subdued at $1.2M to $1.4M, indicating that while sentiment has improved, it remains tempered by continued investor caution.
– Founder-friendly terms continue to accelerate in H1 2025. Founder preferred stock incidence accelerated to 11% in H1 2025, measured by inclusion as a stock provision tracked in equity financing closing set documents, from 9% in 2024 and 6% in 2023.
Earlier this year, we blogged about the DOJ’s lawsuit against KKR alleging serial violations of the HSR Act. Last week, the DOJ announced the formation of a “Comply with Care” Task Force aimed at HSR and other compliance issues involving antitrust investigations. Here’s an excerpt from Troutman Pepper Locke’s memo on the announcement:
On August 29, 2025, during a speech at Ohio State University Law School, Assistant Attorney General Gail Slater announced the creation of a “Comply With Care” task force within the Antitrust Division of the Department of Justice (DOJ), which will focus on enforcement actions against parties flouting disclosure obligations. The speech and task force are a continuation of the Antitrust Division’s recent lawsuits against companies for failing to make merger filings under the Hart-Scott-Rodino (HSR) Act or responding properly to investigations.
AAG Slater stated the DOJ’s commitment to counter those who “undermine sound antitrust enforcement for everyone,” specifically claiming that “a few actors—many of them at Big Law firms” have used “[t]actics designed to circumvent legal process and hinder our investigations.”
The speech highlighted alleged violations of the HSR Act, which are subject to a fine of up to $53,088 per day. The targeted practices include failing to make HSR filings and failing to submit relevant documents.
AAG Slater also criticized other practices that she considered objectionable, including corporate defendants failing to preserve evidence, delay tactics, overuse of the attorney-client privilege, deficient privilege logs, and failure to preserve documents, including ephemeral messages.
PE firms sometimes pursue multiple, simultaneous divestitures of businesses in order to quickly unlock the value of their assets. This recent Alvarez & Marsal “white paper” addresses the challenges associated with pursuing multiple carve-outs and offers guidance on how to meet the organizational and operational challenges they present. This excerpt discusses how to achieve efficient execution of multiple divestitures:
Execution efficiency starts with the strategic sequencing of activities and strong project management. We recommend mapping out the critical path for each carve-out and looking for opportunities to reduce conflict in the tasks; for example, sequencing the timing of major IT cutovers or finance carve-out steps so they don’t all peak at the same moment.
Staggering certain closings or milestone dates may be necessary if the same team (or external advisor) is responsible for deliverables across deals. By sequencing and pacing the work, you reduce the chance of overload that could compromise Day 1 readiness on any single transaction. It’s also prudent to build contingencies into the plan.
We also focus on identifying the “known unknowns” – areas likely to be unpredictable, such as length of time to negotiate certain third-party consents or to receive regulatory clearance – and develop fall-back plans. For instance, in critical supplier contracts, we expect to agree upfront with counterparties that if a consent or split is not achieved by close, an interim arrangement (i.e. an inform-only change provision rather than requiring renegotiation) will allow operations to continue. This flexibility can prevent one delayed negotiation from stalling the entire deal.
Other topics covered in the white paper include the kind of governance and organizational structure necessary to manage the divestiture process, resource planning and prioritization, defining the scope of the businesses included in each carve-out and managing the negotiation process, and employee engagement and change management.
Yesterday, the SEC posted this notice and request for comment for a proposed change to Nasdaq’s rules applicable to initial listings in connection with de-SPAC transactions involving OTC trading SPACs. The change would align the treatment of OTC trading SPACs with similarly situated exchange-listed SPACs.
– Nasdaq is proposing to modify the definition of a “Reverse Merger” in Listing Rule 5005(a)(39) to exclude the security of a special purpose acquisition company, as that term is defined in Item 1601(b) of Regulation S-K (“SPAC”) that is listing in connection with a de-SPAC transaction, as that term is defined in Item 1601(a) of Regulation S-K (“de-SPAC transaction”), upon effectiveness of a 1933 Securities Act registration statement (“Registration Statement”).
A company formed by reverse merger is eligible for initial listing only if it satisfies additional initial listing conditions, including that, immediately before the filing of the application, the combined entity traded for at least one year in the U.S. over-the-counter market, on another national securities exchange, or on a regulated foreign exchange and timely filed all required periodic financial reports, including at least one annual report. A company formed by the acquisition of an operating company by a “listed” SPAC is currently excluded from the definition of reverse merger — and these additional initial listing requirements.
Nasdaq points to the new disclosure requirements applicable to de-SPAC transactions. With those changes, Nasdaq believes a company listing on Nasdaq in connection with a de-SPAC transaction at the time of effectiveness of its registration statement should be excluded from the additional reverse merger requirements.
Nasdaq also proposes to exempt listing applications in connection with business combinations involving an OTC-trading SPAC from the ADV requirement that applies to securities that traded in the OTC market prior to the application.
– Nasdaq also proposes to modify Listing Rules 5315(e)(4), 5405(a)(4), and 5505(a)(5) (the “ADV Requirement”) to exclude the security of a company listing in connection with a de-SPAC transaction, upon effectiveness of a Registration Statement, from the minimum trading volume requirement applicable to newly listing companies that previously traded in the over-the-counter (“OTC”) market.
All the words for uncertainty and inconsistency apply when discussing non-compete laws in 2025. On the federal level, the FTC’s rule prohibiting most non-competes remains blocked on a nationwide basis, still making its way through the courts. But, since that injunction just over a year ago, there’s been a lot of movement at the state level. This Morgan Lewis alert describes the “growing divergence” in how states regulate non-competes.
Some states, such as Minnesota, Oklahoma, and North Dakota, have joined California in effectively banning noncompetes, subject to limited exceptions.
Many states have adopted statutes that cap noncompete temporal durations. Colorado has taken a unique approach, setting a formula to calculate the permissive duration of noncompetes for individual minority owners in the sale-of-business context: the maximum duration of a noncompete is determined by the consideration the individual received from the sale divided by the average annual cash compensation received by the individual from the business (including income received on account of their ownership interest) during the prior two years or the period the individual was affiliated with the business if shorter.
California recently adopted anti-noncompete legislation that purports to extend with a broad reach across jurisdictions if there is some connection to California. Recent cases in non-California jurisdictions have severely limited this “long-arm” aspect of the law, finding it not enforceable in respect of agreements entered into outside of California. It remains to be seen how a California court might rule in a similar case brought inside of the state.
Other states, including Kansas and Florida, have gone the opposite direction, adopting legislation making it easier to enforce noncompetes. Florida’s new CHOICE Act, for example, expands the permissible duration of noncompetes to up to four years and requires that a court issue a preliminary injunction simply upon motion by a covered employer seeking enforcement of a covered agreement.
There have also been a number of important developments beyond federal rulemaking and state legislation surrounding sale- and equity-based noncompetes, some of which we’ve already bloggedabout. Here are some from the alert:
– Auction NDAs now regularly include nonsolicits of employees, and we have observed that the market practice in this area has been to increase the reach and duration of these restrictive covenants. Private equity professionals should note that these agreements have antitrust law implications; a potential buyer signing up to such a restrictive covenant could be exposing itself to liability.
– The Delaware Supreme Court has recently weighed in on forfeiture-for-competition provisions, finding that these provisions, which do not enjoin competition but rather require forfeiture of certain enumerated benefits (whether compensation or equity), are enforceable if they satisfy standard contract law principles and are not subject to the more rigorous “reasonableness” test that applies to traditional noncompetes.
– On the other hand, the Delaware Court of Chancery recently questioned, in striking down a noncompete, the adequacy of consideration to support a noncompete in certain equity-based noncompete contexts, albeit many practitioners would consider this a departure from historical and expected interpretations of the law (and so it is unclear as to whether this decision will be followed in future cases). In another case, the Delaware chancery court declined to reform and enforce what it deemed to be an overly broad noncompete.
Check out our “Antitrust” Practice Area for more. Lots more, in fact! Our section on State Non-Compete Legislation is lengthy and growing.
Multiple tax regimes and financial standards. Added regulatory hurdles. Legal differences ranging from IP to comp and benefits. Not to mention various time zones and possibly languages. Cross-border deals are not for the faint of heart. Having an understanding of transactional differences and what’s customary in other jurisdictions can help avoid headaches, misunderstandings, and ultimately mean getting to closing more quickly amidst all this complexity. To that end, this recent Sheppard Mullin blog explores material differences in legal frameworks and market practices for transactions in the US v. UK so, if you’re new to UK deals, you can better navigate transactions and work with your UK counterparts.
For example, US transactions commonly employ a purchase price adjustment to ensure the financial condition of the target matches agreed-upon metrics at closing. In the UK, you’re more likely to see a “locked-box” approach where the purchase price is fixed based on accounts drawn up to the pre-signing/exchange “locked-box” date with provisions against leakage (value extraction). The blog says this difference reflects broader cultural and legal distinctions:
The US approach emphasizes flexibility and accuracy through post-closing adjustments, allowing for dynamic financial realities at closing. However, this flexibility can lead to disputes and extended negotiations.
Conversely, the UK locked-box mechanism prioritizes certainty and simplicity, offering a fixed price that reduces the need for post-closing negotiations. This method aligns with the UK’s preference for predictability and reduced legal complexity, albeit requiring greater upfront diligence and assurance.
Another significant difference is the approach to sandbagging. US agreements may include a pro-sandbagging clause — allowing a party to recover for breaches of reps and warranties even if it had prior knowledge — or remain silent on the topic — in which case recovery may also be possible depending on the governing state law — with anti-sandbagging provisions being often sought by sellers, but less often included in the final agreement. Across the pond, English law tends to favor “anti-sandbagging” clauses.
English case law supports this position, suggesting that a buyer who knows of a breach is considered not to have relied on the warranty’s accuracy, or to have no or minimal damages, as they are assumed to have assessed the value of the shares or assets knowing the warranty was false. Anti-sandbagging clauses typically restrict the attribution of knowledge to the buyer’s core deal team, excluding knowledge held by external advisors.
MAC or MAE closing conditions allowing the buyer to terminate if a material adverse change or effect occurs, a staple in the US, are also less likely in UK agreements, so that a deal will close absent a failure to receive regulatory clearance, other express condition or a fundamental breach — also giving more deal certainty to sellers.
The blog also addresses differences in due diligence processes/disclosures, equity incentives, third-party reliance on diligence reports and auction processes. This Winston & Strawn article also discusses RWI, restrictive covenants and tax. For even more, check out our “Cross-Border” Practice Area.
You’ve undoubtedly heard a lot about the deal struck by Intel and the Department of Commerce, but last week on TheCorporateCounsel.net, Liz shared some of the corporate governance and activism implications of this development and the possibility for more deals of its kind:
With the President hyping it up on social media that the government’s acquisition of Intel stock will not be the last we see of its equity stake in Corporate America (see this Reuters article and this WSJ article about remarks from Kevin Hassett, the National Economic Council director), all eyes are on the first few companies who are striking deals. Yesterday, Intel filed this Form 8-K to disclose details of its agreement with the Department of Commerce – through which the US Government is becoming the company’s largest stockholder, with a 9.9% interest.
In addition to providing a description of the transaction, which I’m sure many folks are reading with interest, the 8-K updates the Company’s previously disclosed risk factors to reflect the deal’s conditions and impact. Here are a few that jumped out from the Item 8.01 disclosure:
•The transactions are dilutive to existing stockholders. The issuance of shares of common stock to the US Government at a discount to the current market price is dilutive to existing stockholders, and stockholders may suffer significant additional dilution if the conditions to the Warrant are triggered and the Warrant are exercised.
•The US Government’s equity position in the Company reduces the voting and other governance rights of stockholders and may limit potential future transactions that may be beneficial to stockholders. The transactions contemplated by the Purchase Agreement may result in the US Government becoming the Company’s largest stockholder. The US Government’s interests in the Company may not be the same as those of other stockholders. The Purchase Agreement requires the US Government to vote its shares of common stock as recommended by the Company’s board of directors, subject to applicable law and exceptions to protect the US Government’s interests. This will reduce the voting influence of other stockholders with respect to the selection of directors of the Company and proposals voted on by stockholders. The existence of a significant US Government equity interest in the Company, the voting of such shares either as directed by the Company’s board of directors or the US Government, and the US Government’s substantial additional powers with respect to the laws and regulations impacting the Company, may substantially limit the Company’s ability to pursue potential future strategic transactions that may be beneficial to stockholders, including by potentially limiting the willingness of other third parties to engage in such potential strategic transactions with the Company.
•The Company’s non-US business may be adversely impacted by the US Government being a significant stockholder. Sales outside the US accounted for 76% of the Company’s revenue for the fiscal year ended December 28, 2024. Having the US Government as a significant stockholder of the Company could subject the Company to additional regulations, obligations or restrictions, such as foreign subsidy laws or otherwise, in other countries.
As this NYT article notes, the government isn’t acting like a traditional hedge fund activist in the arrangements it has struck to-date – and the typical playbook doesn’t apply. One wrinkle is considering how director duties play out. This 2017 article discusses director duties in the context of the government ownership interests that resulted from TARP.
Public communications & disclosure may also need extra thought. Outside of its SEC filings, Intel is of course praising the deal, and its stock rose the day the deal was announced. While it’s not a novel concept to be enthused about a deal while also having to warn investors of the downsides, it’s less common to include quotes from other companies in the press release. And companies may need to take into account not only the threat of securities litigation from traditional stockholders, but also the pros & cons of this new flavor of “government backing” – and how their comments (or lack of comments) might impact the company’s ranking on the loyalty list.
A recent Farrell Fritz blog flags a new decision from New York’s Second Department holding that the broad “exclusive remedy” language in New York’s appraisal statute precluded a shareholder from bringing a claim for damages based upon share ownership, even if that claim related to another shareholder’s misappropriation of proceeds from the transaction. Here’s an excerpt from the blog:
The conventional path to a fair value appraisal proceeding under Section 623 of the Business Corporation Law (the “BCL”) involves deliberate invocation of the statute by the business entity, the dissenting owner, or both.
For corporation mergers and asset sales, the process ordinarily involves the entity’s transmission of written notice to shareholders of their right to dissent from the transaction and pursue an appraisal remedy (BCL § 605 [a]; BCL § 623 [l]), the shareholder’s written exercise of the right to dissent (BCL § 623 [a], [c]), the entity’s offer to purchase the dissenting shareholder’s interest for fair value (BCL § 623 [g]), a statutory negotiating period (BCL § 623 [h]), and, if the entity and shareholder cannot reach agreement on price, commencement by one side, or the other, of an appraisal proceeding (BCL § 623 [h], [1], [2]).
If, after all of that activity, neither side files an appraisal proceeding within the statutory timeframe, then “all dissenter’s rights shall be lost unless the supreme court, for good cause shown, shall otherwise direct” (BCL § 623 [h] [2]).
Under BCL § 623 (k), the “exclusive remedy” provision of the fair value appraisal statute, “[t]he enforcement by a shareholder of his right to receive payment for his shares in the manner provided herein shall exclude the enforcement by such shareholder of any other right to which he might otherwise be entitled by virtue of share ownership,” except an action for “equitable relief” to enjoin, set aside, or rescind “unlawful or fraudulent corporate conduct” (Breed v Barton, 54 NY2d 82 [1981]).
Can a shareholder lose all rights as shareholder under BCL § 623 (k) where neither the corporation, nor shareholders, did anything to invoke the fair value appraisal statute, and where all parties consent to the transaction?
Can that loss of rights include a shareholder’s ability to challenge a co-shareholder’s post-closing withholding of the proceeds from the very transaction that gave rise to potential dissenters’ rights?
The blog takes a deep dive into the trial court and appellate court decisions in the case and also highlights seemingly conflicting case law. It says that the key takeaway from Klein is that where a corporate transaction potentially triggers appraisal rights under New York law, the failure to exercise those rights “can lead to severe consequences, even for unknown, future events post-dating the closing, like misappropriation of the cash consideration from the very transaction itself creating dissenters’ rights.”
Here’s something that Liz blogged on TheCorporateCounsel.net yesterday:
I was a little surprised to read in this recent NYT DealBook newsletter that of the 59 companies that went public in the U.S. last quarter, 41 of them were SPACs – according to data from S&P Global. I blogged last month that the SPAC/de-SPAC route has been useful for digital asset treasury companies, but these stats show there may be room in the tent for other types of companies as well. This Dealmaker newsletter from The Information (sign-up required) points to cloud providers and defense tech firms as potential de-SPAC candidates.
Meanwhile, this SPAC Insider article says that part of the reason for the SPAC resurgence is the “SPAC-truism” that they tend to thrive when the general IPO market is also improving. Additionally, it attributes this year’s first-half stats to the view that SPACs offer an attractive middle-of-the-road approach for small and mid-cap companies. Here’s more detail:
While SPACs have enjoyed two strong quarters of IPO issuance, Traditional IPOs have lagged that momentum. However, not for long. May and June saw eToro, Circle, and Chime IPO use the traditional route to great success. Interestingly, two of those deals, eToro and Circle, were previously SPAC combination companies. However, the previous administration severely curtailed any crypto-related deals leading to both of these combinations becoming terminated SPACs.
Nonetheless, going the traditional IPO route was the shot in the arm the IPO market needed. As a result, the window is opening only for large, well established companies. On the other hand, the Traditional IPO has also become the provenance of micro and nano-cap companies, which continue to see strong numbers opt for this route as well. For the small and mid-cap companies sandwiched in between these two IPO sizes, perhaps the SPAC route provides a viable option.
However, it should be noted that tariff announcements starting in April significantly curtailed all traditional IPO activity. As a result, SPACs are currently accounting for a larger share of the overall IPO market than we’ve seen in recent quarters. In fact, in Q1-2025, SPACs accounted for 26% of all IPOs, whether that was via Traditional or SPAC route. As of the end of Q2-2025, that percentage is now 39%. However, it is anticipated there should be increased traditional IPO activity in Q3 and the percentage comprised by SPACs should come down to a more normalized level.
It seems like every day there is either a boom or bust predicted for IPOs, so we will stay tuned on how this all shakes out. While I’m not advocating for one path or another here, part of any securities lawyer’s “IPO readiness toolkit” should be understanding the different options and how they might be a fit for different clients and different market conditions. Meredith had shared potential benefits of SPACs a few months ago. And we’ve shared variousthoughts over the past year about being ready to hit the ground running!