M&A and Transaction Solutions

Industry Trends: A Quarterly Newsletter

A resource for industry and transaction solutions insurance and risk management trends for M&A, Tax and Corporate Finance professionals and advisors.

Q3 2023

M&A Risk in Review, 1H 2023

This year’s findings see an increase in alternative financing and ESG scrutiny in an uncertain M&A market, along with dealmakers optimism about the future health of the M&A arena. Opportunities are available for prudent investors who are able to capitalize on current conditions as the market convalesces.

Future Trends for Financial Sponsors: Secondary Transactions

Secondary deal activity will likely continue to strengthen as financial sponsors navigate widespread macroeconomic uncertainty. During periods of market volatility or economic recession, liquidity and financial flexibility are critical. The secondary market is one of the main avenues that can provide liquidity to institutional investors.

Achieving Tax Certainty in an Era of IRS ‘No Ruling’ Policies

As the Internal Revenue Service (IRS) “no ruling” policy continues to expand, the question our clients are now routinely facing is what to do to achieve that same upfront certainty with respect to the outcome of transactions, restructurings, and tax planning in the absence of a ruling. This issue is particularly relevant in the retirement and benefits field where the IRS has instituted a “no rulings” policy on a number of important issues. As an alternative, tax insurance is an effective tool that can provide certainty should a plan be out of compliance or in the event of unintended tax consequences.

Litigation and Contingent Risks: Unlocking the Value in Mergers & Acquisitions

Without the proper insurance, litigation and contingent risks can lock up capital and prevent an M&A deal from closing. Arming your company with the right litigation and contingent risk insurance will enhance the business benefits of an M&A transaction.

Tax Credit Insurance for the Inflation

Reduction Act

The Inflation Reduction Act (“IRA”) is one of the largest federal investments in incentive programs of this type in recent years. As a result, Aon expects investments in renewable energy projects to continue to grow as tax credits continue to be used as a primary federal incentive to encourage investment in solar, wind and other renewable energy projects.

ESG Factors are Carrying Increasing Importance in Mergers and Acquisitions Dealmaking

ESG factors are gaining importance in M&A activity globally, as dealmakers on both sides of the table have come to recognize the growing relevance of each component in the success or failure of a deal.

Secure Investments and Enhance Returns During M&A Carve-out Transactions

In today's rapidly evolving global business landscape, organizations constantly seek ways to adapt and maintain a competitive edge. Companies have begun to streamline their operations and focus on core competences. Consequently, carve-out situations are increasingly at the forefront of M&A transactions.

From Risk to Reward: Turning Data Breaches into Deal Value

Cyber security due diligence failure can vaporize value during strategic transactions such as M&A deals. Use of assessments helps decrease risk exposure and improve company valuation. Companies can turn cyber risks into opportunities through preparation and remediation — allowing both target companies and potential acquirers to see the bigger strategic picture.

Representations and Warranties Insurance Trends

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2023 YTD Tax Submissions Break-Down by Category

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Primary Premium Rate (%) - 2021-2023 YTD

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Upward trend in premium rates in 2021 and 2022 has completely reversed with premiums currently at all-time lows.

Retention (%) -

2021-2023 YTD

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Standard retentions for all deal sizes are now 25%-35% lower than historic averages.

Save the Date: Aon’s 2024 Transaction

Solutions Symposium

Mandarin Oriental Miami

January 30th – February 1st, 2024

Aon’s Transaction Solutions Symposium will examine strategic insights, industry trends, and innovative tools that help improve deal and business outcomes.

If you have any questions, please reach out to our Marketing Team.