Trends & Risk in M&A Transactions

• Overall caps on liability: In the UK it is still common for the financial cap to be between 90-100 percent of the purchase price on smaller transactions. However, there is an increasing trend towards buyers accepting a lower limit on the higher value deals.
• Time periods: It is common in most M&A transactions to have time limits on the buyer's ability to bring claims. These are often between 12-24 months after completion for general warranty claims, and between 4-7 years for tax warranties and the tax covenant.
• Purchase price adjustments: It is very common for an M&A agreement to include a price adjustment mechanism. Bird & Bird's London Corporate fee earners reported that 78% of transactions in the last 12 months have involved some form of adjustment.