MoFo on M&A this year: Mostly clear sailing, but trade friction and tax laws could be problems
The Silicon Valley-based firm Morrison & Foerster has released its M&A outlook for this year, and the firm remains pretty optimistic. It says last year, despite a weak stock market, was solid, with tech, health care, and cross-border dealmaking leading the way.
But if cross-border M&A was strong, it showed signs of stress. The number of deals fell slightly last year from 2017, and deals between the United States and China falling to under $3 billion, down sharply from $8.7 billion in 2017 and $55.3 billion in 2016.
This year, MoFo says, the effects of last year’s tax overhaul will aid dealmaking. But trade tensions and U.S. national security concerns could pose problems. In particular, the Foreign Investment Review Risk Modernization Act of 2018 (FIRRMA), which became law last August expanded scrutiny of cross-border deals. In particular, deals involving non-controlling investments involving critical infrastructure, critical technology, or data of U.S. citizens will be subject to greater scrutiny.
To download the full report, go here.