Insights

Negotiation Strategy: LVMH Acquisition of Tiffany & Co.

Long before LVMH publicly announced any designs on acquiring Tiffany & Co., Arnault made the decision to build a Louis Vuitton factory in Texas, likely at least in part to win over the President of the United States in anticipation of smoothing the path for a future acquisition.

Continue Reading

Purchase Price in M&A Transactions

How to calculate purchase price in an M&A transaction. In this example we start with enterprise value and work towards purchase price.

Continue Reading

Covenants

A covenant is a promise to take an action (or refrain from taking an action) that must be true for the period of time described in the purchase agreement.

Continue Reading

Indemnification

An indemnity is simply protection against loss. Indemnification protects a party from losses due to broken “promises” (i.e., breaches of representations and warranties or covenants), and requires that the breaching party make the other party whole for losses realized.

Continue Reading

Representations and Warranties

Think of the representations in this section as promises that certain statements about the company are true, and think of the warranties as a promise to protect the buyer in the event that these statements are not true. In the event that a representation made is inaccurate, the buyer knows that they can be made whole for the associated loss (we will cover this in detail under Indemnification).

 

Continue Reading