Doing the Deal

Richard Hall, a corporate partner at Cravath, shares insights for companies involved in M&A activity. A transcript of the video appears below.

It’s very easy for a company in the middle of an M&A transaction to get caught up in the frenzy of the deal. But from the perspective of the company, you’ve got to think about why you’re doing it—what are the objectives that are to be pursued? This influences things like how you do due diligence, how you negotiate the contract, how quickly or how slowly you move with your counterparties. All of those things flow from why you’re doing it.

Keeping the Board Involved

As management or as advisors, you don’t want to get to a point where the Board of Directors is saying, “I don’t like this process” or “I think we should be taking more time.” It’s the Board’s prerogative, as the ultimate decision-maker of the company, to make those statements and make those demands of management and the deal team. It’s incumbent upon us to make sure that if those demands are made, that they are made at a time when they can be managed consistent with the rest of the process. A very key part of this is making sure that the Board of Directors has signed off on the basic strategic vision for the transaction.

Global Economics

With increasing world economic integration, as a company thinks about its alternatives, needs and challenges, it’s simply much more likely now than it was 20 or 30 years ago that the challenges or the solutions arise outside the United States. It’s very important in this circumstance and in this world for a management and Board’s legal advisors to have experience in transactions that do cross borders.

The Impact of Technology

Modern technology has made it possible for transactions to be executed more quickly and more efficiently. However, that doesn’t mean all transactions should be done more quickly. It is very important that parties to M&A transactions, their management and their advisors think about how to use technology to achieve business objectives.

The other aspect of technology is that it’s made available to all of us greater informational resources. Anybody now, through technology, can produce a list of precedent transactions. But only a high-quality advisor can understand the right conclusions to draw from those in the particular case at hand.

The Role of Advisors

Ultimately, M&A lawyers are problem solvers. Our clients come to us with business objectives. Our job is to understand those objectives, to identify the problems that are likely to arise in achieving those objectives and to reach into the toolbox and find the solution to those problems.