Advanced Tax Considerations in Negotiating, Structuring, and Documenting M&A Transactions

Consider key tax issues, new tax opportunities, and avoidable tax traps when negotiating, structuring, and documenting M&A transactions in light of changes made by both the 2017 Tax Act and recently promulgated Treasury regulations.

Tax consequences are a crucial factor impacting the negotiation, structuring, and documentation of M&A deals. At the outset of a deal, counsel and other M&A advisers must understand the tax ramifications of a planned transaction, including how the 2017 Tax Cuts & Jobs Act (TCJA) and the U.S. Treasury's implementing regulations have changed the tax landscape, in order to achieve optimal tax results for their clients. A broad array of buy-side and sell-side issues should be identified and evaluated by M&A tax counsel, including the benefits and risks of a stock deal vs. an asset deal, the advantages and disadvantages of structuring a transaction as taxable as opposed to tax-free, the tax implications of so-called earn-outs and other deferred payment arrangements, and how tax indemnification provisions should be drafted to avoid or resolve these issues.
In 2017, the tax stakes of both domestic and international mergers, acquisitions, joint ventures, and other strategic alliances were fundamentally altered by important changes in the U.S. tax law, not least among them, the 14-percentage point drop in the top U.S. corporate tax rate. However, many other important amendments to the Internal Revenue Code impact the way M&A deals should be structured. The changes to the U.S. international tax provisions were among the most sweeping, so that today, practitioners advising clients on cross-border deals should possess a firm understanding of the most recently issued Treasury regulations and other guidance, all of which is likely to affect how a client's international transaction should be structured for optimal tax results.
In this course, our experienced M&A panel will analyze key tax issues from both the buyer's and the seller's perspectives. The panel will highlight new structures to think about, tax opportunities to consider, as well as traps to avoid when negotiating, structuring, and documenting an M&A transaction. The panel will consider both purely domestic deals as well as ones with complex international tax implications. Illustrative examples will be provided.

Faculty

Roger Royse

Haynes and Boone, LLP

Pamela A. Fuller

Zahn Law Group