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By Oliver Browne, Katie Campbell and Ashleigh Gray

Given ongoing competition between buyers in a strong sellers’ market, the resilience of seller break fees as a feature of the European M&A market is surprising. According to the Latham & Watkins 2017 European Private M&A Market Study (which examined over 190 deals signed between July 2015 and June 2017), 10% of European private M&A transactions featured a seller break fee, slightly up from 8% in 2016.

“Break fee and reverse break fee quantum ranges greatly based on transaction factors. Examples of reverse break fees in UK public M&A in the first half of 2017 ranged from 1% to 2.5% of the deal value.”