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ESG on the Rise in M&A Transactions

Posted in ESG, M&A and Private Equity

Dealmakers should continue to weigh the impact of ESG issues on M&A deals as ESG standards evolve.

By Richard Butterwick, Pierre-Louis Cléro, Paul A. Davies, Tobias Larisch, Michael D. Green, James Bee, and Catherine Campbell

Environmental, social, and governance (ESG) issues have become increasingly important for corporates in recent years, driven initially by investor and consumer demand, and now by legislative developments across multiple jurisdictions.

As ESG becomes a growing part of the dealmaking conversation and acquirers seek to improve ESG credentials through individual acquisitions, the M&A market is showing a greater demand for enhanced ESG due diligence, particularly in relation to value chains. A wider range of deal provisions are being considered in light of their potential to enhance the ESG outlook of acquisitions. Further, regulatory developments and forthcoming changes mean that reporting obligations, both voluntary and mandatory, should remain front of mind. In this M&A Views article, we consider how corporates and M&A dealmakers are responding to the growing importance of ESG. Continue Reading

US Congress Passes Uyghur Forced Labor Prevention Act

Posted in Commercial, Environment

The UFLPA aims to clamp down on the import of items produced by alleged forced labor in and relating to the XUAR.

By Erin Brown Jones, Les P. Carnegie, Paul A. Davies, Nathan H. Seltzer, James Bee, and Allison Hugi

On 16 December 2021, the US Senate unanimously passed the Uyghur Forced Labor Prevention Act (UFLPA), following its approval in the US House of Representatives earlier the same week. The UFLPA is one of several measures that the US hopes to use to prevent what it views as forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region (the XUAR) of China. The UFLPA is the culmination of bipartisan attempts over a number of months to introduce a bill that would restrict imports from the XUAR. Continue Reading

Tracking Stocks May Serve as a Tool for the ESG Pivot

Posted in Finance and Capital Markets

A relic of the dot-com era may prove useful in attracting investors seeking specific exposures that are ESG-aligned.

By Roberto L. Reyes Gaskin and Anna Ngo

Shareholders, regulators, and other stakeholders continue to drive the integration of environmental, social, and governance (ESG) considerations into corporate strategy and practice. Recent surveys of institutional investors revealed that 22% expected their portfolios to be more than 75% aligned with ESG in the next two years,[1] while 62% stated that an ESG-aligned portfolio was more likely to exceed the market rate of return.[2] Many publicly traded companies are therefore engaged in integrating ESG into their business models, value chains, practices, and reporting. Continue Reading

UK FCA Confirms New Rules to Remove Barriers to Listing

Posted in Finance and Capital Markets

The new rules aim to make London a more attractive listing venue for founder-led and other innovative IPO candidates.

By Chris Horton, James Inness, Anna Ngo, and Johannes Poon

On 2 December 2021, the UK Financial Conduct Authority (FCA) published a Policy Statement (PS21/22) confirming the following key changes to its listing rules that took effect from 3 December 2021:

  • Limited form of dual class share structure permitted under the premium listing segment

Premium-listed issuers can now adopt a targeted and time-limited form of dual class share structure (DCSS) which would operate to prevent the removal of a director and deter takeovers during a five-year period following admission. Continue Reading

UK High Court Sanctions £10.1 Billion Annuity Book Transfer From PAC to Rothesay

Posted in Dispute Resolution, Finance and Capital Markets, M&A and Private Equity

The judgment clarifies the Court’s approach to proposed transfers under Part VII of FSMA, as well as the scope and application of s. 110(1)(b). 

On 24 November 2021, the High Court of England and Wales (the Court) sanctioned a £10.1 billion annuity book transfer from The Prudential Assurance Company Limited (PAC) to Rothesay Life Plc (Rothesay) under Part VII of the Financial Services and Markets Act 2000 (FSMA).

The Court previously declined to sanction the transfer following an initial sanction hearing in July 2019. The Court of Appeal then overturned that decision in December 2020 after an appeal by PAC and Rothesay, and the transfer was remitted to the Court for a further sanction hearing between 8-10 November 2021 before the honourable Mr Justice Trower (the Remitted Sanction Hearing). The Court’s judgment following the Remitted Sanction Hearing was handed down on 24 November 2021 (the Judgment), and provides useful guidance on certain aspects of the Part VII process. Continue Reading

UK’s MHRA Seeks “Bold New Regulatory Regime” for Medical Devices and Diagnostics

Posted in Life Sciences

The agency’s consultation on the post-Brexit regulatory framework for medical devices and diagnostics aims to support innovation and sustainability, among other goals.

By Eveline Van Keymeulen, Ranulf Barman, Oliver Mobasser, and Frances Stocks Allen

A 10-week consultation launched by the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) on the future regulation of medical devices, including in vitro diagnostics (IVD), will close on 25 November 2021 at 11:45 p.m. GMT.

The backdrop for the consultation is the UK Medicines and Medical Devices Act 2021 (the Act), which came into force on 11 February 2021 and paved the way for new regulations to shape the post-Brexit landscape for medicines and medical devices in the UK. The Act introduced extensive delegated powers in favour of the Secretary of State or an “appropriate authority” to amend or supplement regulations in the area of human medicines and medical devices.

This Client Alert analyses the most substantive proposed changes and includes an Appendix that provides a detailed summary, as well as commentary on whether the proposal aligns with or diverges from the EU regulatory framework.

Private Equity Market Study, Eighth Edition

Posted in M&A and Private Equity

By Tom D. Evans, David J. Walker, and Catherine Campbell

Current Trends

The M&A market is constantly evolving — from the predominantly seller’s market of H2 2019, through the tumultuous times of H1 2020, to the strong rebound of H2 2020 and to the highly competitive seller’s market of H1 2021 — deal dynamics are shifting. Deal terms vary by transaction size, industry sector, and jurisdiction. Having a thorough knowledge of market trends is critical to negotiating and executing a successful deal.
Continue Reading

Private M&A Market Study, Eighth Edition

Posted in M&A and Private Equity

By Robbie McLaren and Catherine Campbell

Current Trends

The M&A market is constantly evolving — from the predominantly seller’s market of H2 2019, through the tumultuous times of H1 2020, to the strong rebound of H2 2020 and to the highly competitive seller’s market of H1 2021 — deal dynamics are shifting. Deal terms vary by transaction size, industry sector, and jurisdiction. Having a thorough knowledge of market trends is critical to negotiating and executing a successful deal. Continue Reading

US DOJ Emphasises Importance of Corporate Culture

Posted in Dispute Resolution

UK companies should be aware of the increasing focus on corporate culture by regulators on both sides of the Atlantic.

By Nathan H. Seltzer, David Berman, Stuart Alford QC, Christopher M. Ting, and Nell Perks

In a recent speech that has garnered significant attention, US Deputy Attorney General Lisa Monaco highlighted several important changes in how the US Department of Justice (DOJ) will pursue corporate crime during the Biden Administration. (Read Latham’s in-depth Client Alert analysing the speech and its potential impact, and Latham’s blog post highlighting matters of particular relevance to UK PLCs.)

This post highlights the DOJ’s particular emphasis on the importance of “corporate culture”. Continue Reading

Senior US DOJ Official Sets Forth New Priorities for Pursuing Corporate Crime

Posted in Dispute Resolution

The priorities will impact non-US companies who may face a US DOJ with a renewed emphasis on combating corporate crime.

By Stuart Alford QC, Nathan H. Seltzer, and Christopher M. Ting

In a recent speech that has garnered significant attention, the Deputy Attorney General of the United States, Lisa Monaco, highlighted several important changes regarding how the US Department of Justice (DOJ) will pursue corporate crime during the Biden Administration. Latham’s in-depth analysis of the speech and its potential impact can be found here.

In addition to reinforcing prior statements that the Biden Administration will prioritise the prosecution of corporate and white collar crime, the speech touched on several areas that may be of particular relevance to UK and other non-US companies. This blog post highlights some of those areas. Continue Reading

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