Law 794: Mergers & Acquisitions
This course covers the corporate law aspects of mergers & acquisitions (M&A). M&A is usually a major event in the life of a firm. For the acquirer M&A often involves a major change in the scale and scope of business activities, while for the target firm M&A is often an endgame in which shareholders are enticed by generous compensation to part with their investment in the target. For both sides, the stakes are high. Because of the high stakes, corporate clients on both sides of the deal (as well those representing third parties who want to facilitate or thwart the deal, for their own reasons) are willing to pay a high premium for top notch legal representation. This makes M&A an attractive practice area for lawyers as well as a fast-developing field in which creative lawyers constantly develop new legal innovations to help their clients outmaneuver opponents.
At its core, the law of mergers and acquisitions is a high-stakes corporate governance issue: while acquirer and target maneuver against each other, there is also an internal battle between the shareholders and management of each firm. Shareholders need their management to present a united front against potential acquirers, who could otherwise exploit divisions between shareholders to buy the firm for a pittance. But management may have its own incentives, such as keeping their jobs or receiving generous golden parachutes. Shareholders rely on corporate governance mechanisms to keep management accountable, and some shareholders use these mechanisms to leverage their own agendas in the M&A negotiations. For this reason, the first half of the course focuses on mechanisms of corporate governance. We then examine the legal mechanics that are specific to M&A deals (studying applicable Delaware and Federal laws). Finally, we study the practice of M&A deals, from the strategic maneuvering of the various parties ("the M&A dance") to the crafting of the acquisition agreements.
Sequence and Prerequisites: Business Associations I is a prerequisite.
An M&A practitioner would significantly benefit from knowledge of tax law, antitrust law and laws governing executive compensation, so students planning to become M&A specialists should consider studying these fields either before or after the M&A course. However, knowledge of these fields is neither required nor expected for the M&A course.
Evaluation: Grades in the course will be based on a take-home exam. A student may request to submit a project (e.g., case study, research paper or teaching module) in lieu of an exam, but this may only be done with advance permission, and such permission will only be given as an exception, when circumstances justify it per the professor's discretion.