After a record-breaking year for mergers and acquisitions fueled by a multitude of megadeals, attorneys expect a wave of midsized transactions to dominate 2016 as the companies involved in 2015’s largest deals seek to shed assets to gain regulatory approval and ditch business units that no longer fit their long-term plans.
These assets will be particularly attractive because, in many cases, they are performing just fine, Richards explained. They are instead becoming available to mollify antitrust regulators or because they will no longer fit with the future of the merged business, he said.
According to Howard Berkower, a partner with the corporate practice at McCarter & English LLP, major transactions often bring together two companies that feature overlapping business divisions or units that are not integral to the now merged entity going forward. That means that a sale of those assets, even if directed by a regulatory authority, can be a positive for all sides.
“In many instances, these are businesses that would be in a better home were [they] owned by a smaller company in that specific business space or a private equity firm,” he said.