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E-MailSteven Davidoff Solomon is a Professor of Law at UC Berkeley School of Law. The following post is based on a textbook written by Professor Davidoff Solomon; Claire Hill, Professor of Law at the University of Minnesota School of Law; and Brian Quinn, Associate Professor of Law at Boston College.
In our recently released textbook Mergers and Acquisitions: Law, Theory, and Practice we aim to change the way that transactional law is taught in U.S. law schools by immersing students in a deal environment.
We wrote this book with the intent of teaching students not just the law and theory behind mergers and acquisitions, but the practice of the art itself. Being an M&A practitioner or litigator requires not only a knowledge of the law—the statutes, cases, and regulations—but also the documentation and the practices within the transacting community. The textbook can also serve as a treatise—outlining and documenting the current state of M&A law and practice. It is therefore useful not just for students but also for practitioners and academics.
The textbook focuses on a number of recent deals, including the management buy-outs of Dell and Dole and the recent hostile bidding war between Valeant and Allergan. Through these deals, students learn the basics of mergers and acquisitions, including the law of mergers, appraisal rights as well as the case-law covering the standards applicable to the conduct of boards of directors.
But deal lawyers need to know more, including how to negotiate and document a deal. We include extensive materials concerning drafting the key documents in an M&A transaction. We start with the initial documents, the non-disclosure agreement and investment banker engagement letter. We also cover issues such as don’t ask/don’t waive standstills and the role of the confidentiality agreement in forestalling a hostile bid.
A chapter is devoted to the structure and contents of an acquisition agreement. Students learn in detail what such agreements contain. They learn as well why and how, both from a theoretical and practical perspective, the agreements are structured as they are, with representations and warranties, covenants and agreements, closing conditions, and termination provisions, among others. Students are taught the function of each type of provision, and how the negotiations might proceed. They are also taught specifics of no-shop and go-shop clauses as well as lock-ups.
We also aim to take students through the deal process, including how auctions are run and companies are sold, as well the choices that boards make in deciding whether and how to sell the company. The textbook discusses and puts the current Delaware law on mergers and acquisitions into perspective. The rise and fall of both Revlon and Unocal are also discussed, as is the role of independent directors in making the sale decision. One chapter takes students through the development of legal standards governing freeze-out mergers in order for them to obtain a grasp of how Delaware decides cases and develops its transactional law.
Our book aims to educate students to think three-dimensionally about the M&A transaction. There are extensive materials on the federal securities laws, including the Williams Act, as well as an entire chapter on how to structure cross-border transaction. Also included is a chapter on the antitrust and national security review process since these increasingly figure as important components in the M&A process. There are also two chapters on accounting and valuation, subjects that are necessary for M&A practitioners need to know, but that traditional law school classes do not cover.
Ultimately, the book is based on our extensive academic and practitioner experience. Our goal is to change the way that M&A is taught, integrating all of the aspects of the field in order to ensure students are ready to go from the get-go and that the M&A class becomes a haven for deal junkies.
The book is available for purchase here.
