ARTICLE
24 October 2023

Earn-Outs In Cross-Border M&A: Choose Wisely

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Fasken

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As deal lawyers know well, economic uncertainty and valuation gaps over recent years have increased the use of earn-outs in M&A.
Canada Corporate/Commercial Law
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Earn-outs are in.

As deal lawyers know well, economic uncertainty and valuation gaps over recent years have increased the use of earn-outs in M&A.

But as M&A disputes from Delaware caution, earn-outs can also convert "today's disagreement over price into tomorrow's litigation over the outcome."

Careful earn-out drafting is therefore key, as is heeding the lessons of the growing body of earn-out caselaw.

Writing in The M&A Lawyer (PDF, 194 KB), we highlight what dealmakers need to know to avoid their next earn-out clause turning into the next earn-out decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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