Skadden’s 2024 Insights

Corporate Trends

Global M&A Activity Endures Headwinds in 2023 and Displays Resilience Going Into 2024
Despite market headwinds, dealmakers have looked to carveouts, spin-offs, joint ventures and other creative deal structures to engage in M&A activity, but it is taking longer to hammer out deal terms.

Gray Zone: When a UK-Incorporated Company Is Protected by Neither the UK Takeover Code nor US Law
Some U.K.-incorporated companies listed in the U.S. could find that the U.K. Takeover Code does not protect them in the event of a hostile or speculative bid, and that the defenses available to U.S. companies are not applicable.

Europe Increasingly Turns to Special Committees in Transactions Involving a Controlling Shareholder
Although many European companies have controlling shareholders, independent special committees have not played the crucial role they do in the U.S. That is beginning to change.

Market Opportunities for Cross-Border M&A in China Persist Despite Regulatory Changes and Trade Tensions
New trade and investment restrictions notwithstanding, foreign companies and private equity firms continue to seek M&A opportunities in China, and Chinese businesses are buying assets and realigning operations abroad.

How Companies Are Adapting to Volatile Capital Markets and Planning Ahead
From navigating volatility to optimizing balance sheets and exploring creative financing strategies, both companies and investors were able to successfully manage market challenges in 2023 to be ready for opportunities in 2024.

Chinese Issuers See Progress on US Audit Issue and HKEX Reforms, but US Policies Could Impact Tech Companies
Progress on U.S. audit inspections will help China-based companies, as will liberalization of HKEX rules. But China is more closely monitoring offshore capital market transactions, and new U.S. restrictions could affect certain tech companies.

A Decades-Old Question Answered: Term Loans Are Not Securities
The Second Circuit recently laid to rest the argument that the terms of syndicated term loans are now so similar to those of high-yield bonds that they should be subject to federal and state securities laws, including registration, disclosure and trading rules.

Adapting to a Dynamic Commercial Real Estate Landscape
As reduced demand and higher rates take a toll on commercial real estate, lenders are demanding more protections, and borrowers with maturing debt need to develop strategies. The stress will create opportunities for those with capital.

Climate Change and Its Undeniable Impact on Insurance: How To Respond?
Climate change will interfere with insurers’ risk predictions and pricing policies. They may need to work with clients on new types of coverage, apply novel technology and collaborate with governments and other entities.

Exits, Ring-Fencing and Other Risk Management Strategies for Multinationals Operating in Geopolitically Volatile Areas
With a growing risk of geopolitical disruptions, multinationals should devise contingency plans for vulnerable local businesses, such as that range from structures that ring-fence the business and to exit, cash management and supply chain strategies.

ESG

The Supreme Court’s Affirmative Action Opinion Continues To Spawn Challenges to DEI Programs
Businesses can expect continued challenges to DEI programs, as emboldened opponents to these programs seek to expand the reach of the Supreme Court’s opinion prohibiting the consideration of race in university admissions.

Non-EU Companies Face Challenges Preparing for Europe’s Corporate Sustainability Reporting Directive
Non-EU companies need to prepare for the EU’s sustainability reporting requirements taking effect in coming years. But many crucial details will not be finalized until 2026, so it is essential to design reporting systems with flexibility.

Antitrust

As US Antitrust Agencies Double Down on Merger Enforcement Approach, New Deal Strategies Emerge
The DOJ and FTC continue to pursue an aggressive merger enforcement agenda with new merger guidelines and filing requirements. Companies can still close deals if they structure them to “go the distance” and have a solid litigation strategy.

EU and UK Merger Regulators Look Beyond Horizontal and Vertical, With Digital ‘Ecosystems’ a New Focus
EU and U.K. merger regulators are applying novel forms of analysis to deals in the digital sector, looking at “digital ecosystems” and considering the potential for a combination to diminish potential competition in nascent markets.

Other Regulatory Developments

AI in 2024: Monitoring New Regulation and Staying in Compliance With Existing Laws
Companies that develop or employ AI tools have to consider proposed AI-specific regulation as well as an array of existing IP, privacy, employment and other applicable laws.

Private Sector Space Projects Take Off, Leaving Legal Unknowns in Their Contrails
The rapid expansion of the commercial space industry, fueled by accelerating investment, is generating a host of novel legal issues, from liability to IP ownership, taxation, dispute resolution and insurance.

Transferability: IRS Guidance Energizes Participation in a New Tax Credit Monetization Strategy
Recent IRS guidance on provisions of the Inflation Reduction Act that make it easier to purchase renewable energy tax credits is helping to attract new types of investors and spurring a more active market in the credits.

With New Technology and New Hires, the IRS Aims To Audit More Effectively While Improving Taxpayer Services
The IRS is overhauling its enforcement capabilities, and large corporations, partnerships and wealthy individuals will see more scrutiny. The agency is also working to improve taxpayer services and resolution processes.

Election Issues on the Horizon: 2024 National Party Conventions, Transition Efforts and Inaugural Activities
Companies and executives planning to support the 2024 political conventions and later, transition and inaugural functions, may be subject to an array of federal, state and local restrictions on monetary and in-kind contributions.

‘Small Yard and High Fence’: US National Security Restrictions Will Further Impact US-China Trade and Investment Activity in 2024
New U.S. restrictions on exports and investments in Chinese technology businesses are likely in 2024. In addition, there are moves in Congress and at the state level to limit Chinese investment in agricultural businesses and farmland.

Enforcement and Litigation

Expert Allegations Could Become More Frequent in Securities Fraud Complaints and Possibly Erode Pleading Standards
A Ninth Circuit panel ruling that plaintiffs could use expert analysis to bolster securities fraud claims potentially opens the door to more frequent use of expert allegations in securities fraud complaints.

DOJ Leverages the Private Sector To Achieve Enforcement Goals
This year, the DOJ has announced new policies encouraging voluntary self-disclosures by corporations and created a safe harbor for companies that disclose wrongdoing they discover in the course of an acquisition.

FTC Enforcement Trends in Consumer Protection Under the Biden Administration
The FTC has aggressively sought to fulfill its mandate to protect consumers, pursuing dozens of enforcement actions and promulgating new rules and guidelines that hint at its priorities in 2024.

Fourth Circuit Holds That Bankruptcy Courts Are Not Limited by the ‘Case and Controversy’ Requirement of Article III
The Fourth Circuit held recently that bankruptcy courts are not bound by the “case and controversy” requirement of the Constitution’s Article III because they derive their power from Congress, acting under its Article I bankruptcy powers.

Insights From Delaware Litigators: What We’re Watching in 2024
Delaware has expanded Caremark oversight duties to officers. Key issues in 2024 are likely to include follow-on rulings in that area, plus cases involving busted deals, de-SPAC transactions and claims for lost deal premiums.