Reviewing the ABA 2017 Private Target M&A Deal Points Study: new RWI takeaways

For the first time, the American Bar Association’s Private Target Mergers and Acquisitions Deal Points Study (the Study) includes data points on the use of representation and warranties insurance in transactions. The Study analyses publicly available purchase agreements for transactions for which purchase agreements were executed and/or completed in 2016 and the first half of 2017 that involved private targets being acquired by public companies in the US (the Agreements). Representations and warranties insurance (RWI) is a tool increasingly used by buyers and sellers in the context of mergers and acquisitions. As previously discussed on this blog here and here, RWI offers parties the ability to successfully negotiate deals by reducing the parties’ exposure to losses attributable to breaches of the seller’s representations and warranties in the purchase agreement. From the buyer’s perspective, this tool offers a way to enhance its protection from breaches…

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