As the economy around the world has grown, an increasing number of businesses in California and elsewhere have turned to mergers and acquisitions. The year 2017 showed the third-highest rate of mergers and acquisitions since the 2008 financial crisis.
An increasing number of chief executive officers have grown bolder with the buoyancy of the markets and have actively pursued their targets for mergers and acquisitions. In 2017, a key characteristic of the mergers and acquisitions landscape was that more buyers were willing to approach their target companies without solicitation. In some cases, the targets resisted, such as when Qualcomm refused to engage in talks over Broadcom’s $103 billion offer to take over the company.
Eighty percent of the cases in which the sales were completed involved buyers that approached the target companies without being solicited by the sellers. Mergers and acquisitions have proceeded at a high rate over the past three years because of CEO confidence and cheap rates for debt financing. In 2017, global mergers and acquisitions reached $3.54 trillion. In 2016, the activity reached $3.59 trillion. Mergers and acquisitions peaked in 2015 at $4.22 trillion.
Mergers and acquisitions are expected to remain hot in 2018. With the passage of the tax reform bill, companies may have more cash to invest in the transactions. Some companies in Europe and elsewhere may be led to invest in U.S. mergers and acquisitions with the drop in the corporate tax rate. Businesses that are considering mergers and acquisitions as a means to grow might want to retain the help of a law firm that is experienced in handling these complex transactions. The attorneys may help their business clients to conduct due diligence on the companies that are under consideration and to negotiate takeover offers. They may then assist their clients throughout the transaction process while advising them about various legal issues that might come into play.