Kirkland's Wolf on M&A in 2023

The video discusses the challenges and dynamics of the M&A market in 2023, highlighting factors like inflation, interest rates, and geopolitical tensions affecting valuations. It explores buyer and seller strategies, including the use of public pressure and creative deal structuring to bridge valuation gaps. The regulatory environment's impact on deal-making is examined, with a focus on risk allocation and strategic approaches to regulators. The video emphasizes the need for innovative solutions to navigate market and regulatory challenges.

What are some of the external factors that have contributed to the valuation disconnect in the M&A market?

• Technological advancements

• Inflation and interest rates

• Cultural differences

• Environmental concerns

How are buyers adjusting their strategies in the current M&A market?

• By focusing only on domestic deals

• By increasing the number of hostile takeovers

• By considering market premiums despite stock price drops

• By avoiding all high-premium deals

What is a significant regulatory challenge mentioned in the transcript?

• Increased competition from international markets

• Decline in available assets

• Uncertainty in regulatory approvals

• Lack of skilled negotiators

What creative strategy is being used to manage regulatory risks in M&A deals?

• Increasing the number of board members

• Implementing reverse termination fees

• Focusing on short-term gains

• Reducing the size of the deals

What is a CVR in the context of M&A deals?

• A type of regulatory approval

• A contingent value right offering additional payment based on future events

• A method to increase stock liquidity

• A financial instrument to hedge currency risk

How are companies structuring deals to share risks?

• By reducing the number of stakeholders

• By using contingent value rights (CVRs)

• By avoiding regulatory scrutiny

• By focusing on short-term profits

What is the impact of regulatory actions on M&A deals according to the transcript?

• They have led to more strategic approaches and legal advice

• They have increased the speed of deal closures

• They have reduced the number of deals significantly

• They have no significant impact