Expediting M&A Deal Processes Via Negotiations Vs. Auctions

Law360, August 12, 2020

In their Expert Analysis published on Law360.com, Managing Principal Gaurav Jetley and Vice President Yuxiao Huang employ a recently available dataset to shed new light on the timeline for M&A negotiations, both before and after a deal is announced.

Mr. Jetley and Dr. Huang relied on data compiled by professors Tingting Liu from Iowa State University and Micah Officer from Loyola Marymount University (an Analysis Group affiliate), who reviewed proxy filings of over 1,300 transactions completed between 1994 and 2016. This research provided a unique look at the evolution of bidding processes inside the “black box” of prepublic merger negotiations.

In “Expediting M&A Deal Processes Via Negotiations Vs. Auctions,” the authors are able to take a closer look at the deal process, and particularly the pre-announcement stage of deals, to discern subtle but important differences between auctions and one-on-one negotiations in the timing and evolution of value creation. With the increased attention being given to M&A deal uncertainty and event risk during the COVID-19 pandemic, a better understanding of the determinants of deal timelines may prove useful in decision making for both sellers and prospective buyers.

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Jetley G, Huang Y