2011: Checklist for successful acquisitions in US

By Adam O. Emmerich & Robin Panovka, Wachtell, Lipton, Rosen & Katz

Cross-border M&A volume increased in both absolute and relative terms in 2010, representing not only an increasing portion of both US and global M&A, but also including a more diverse variety of industries, target countries and sources of acquisition capital than in prior years. Almost 42% of the US$2.7 trillion of M&A in 2010 was cross-border, compared to less than 27% of US$2.2 trillion in 2009. Emerging markets are driving an increasing share of crossborder activity, particularly in the natural resources and financial sectors, but also in acquisitions of household names and of sophisticated industrial enterprises in developed economies. At the same time, protectionist attitudes continue in many markets, and the difference between success
and failure often depends on a well thought-out strategy and impeccably executed tactics.

In the United States, despite a few well-publicized examples of thwarted deals, sophisticated market participants have come to understand that most acquisitions can be effected through careful advance preparation, strategic implementation, and deal structures that anticipate likely concerns. The most notable exceptions to the general rule are the defense sector and other highly-
sensitive areas, such as sophisticated technology sectors. However, the US remains fundamentally an open market that welcomes foreign capital and investment.

As with purely domestic transactions, cross-border deals involving investment into the United States are more likely to fail because of poor planning and execution than due to fundamental legal restrictions or requirements.
Following is our updated checklist of issues that should be considered in advance of any acquisition or strategic investment in the US Of course, each cross-border deal is different, and implementation of the checklist will depend on the facts, circumstances and dynamics of the particular
situation: