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John C. Coates

M & A transactions are governed by contracts that exhibit constrained variation – they are negotiated, yet full of boilerplate, tailored, yet full of patterns and regularities. This chapter reviews the suite of contracts commonly needed in an M & A transaction, and offers two complementary descriptions of the core ‘deal contracts’ in M & A. The first tracks the customary organization of the contracts themselves, and the second re-analyzes their contents with a new, functional typology derived from the purposes of deal contracts: (1) specification (especially of deal structure, pricing terms, and, in partial acquisitions, the business to be acquired); (2) risk-sharing; (3) process management; (4) control and information sharing; and (5) dispute management. Each description is illustrated by examples from and links to recent, high-profile deals, augmented with cross-sectional data from a representative sample of M & A contracts involving U.S. targets. Ways that ownership and regulation shape M & A contracts for U.S. targets are summarized, and data consistent with that summary is presented. Finally, the rapidly growing body of empirical research on the contents and effects of M & A contracts is surveyed. The chapter concludes with a brief agenda for future research on M & A contracts.