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Deal or No Deal?

Deal or No Deal

Global mergers and acquisitions activity suffered its weakest first quarter in a decade as an abrupt banking crisis, stubborn inflation and continued interest rate hikes worsened stock prices and drove fears of a recession, depressing dealmaking. The value of mergers and acquisitions dropped 45% to $550.5 billion between January and March compared to the same period last year, the largest decline in the first quarter since 2001. 

In contrast, activist shareholders remain busy, launching a total of 135 campaigns in Q1, the highest first quarter total since 2019. So far, only 18 of those have escalated to a proxy fight, but with many annual meetings fast approaching, we expect several more to evolve into shareholder contests.

These trends in the capital markets were top of mind last month at the Tulane Corporate Law Institute, the annual gathering of leading lawyers, bankers, proxy solicitors and communications advisors focused on M&A and shareholder activism, including several from FGS. Among the highlights:

  • Foreshowing the brutal quarterly dealmaking data, JPMorgan Chase’s Global Head of M&A Anu Aiyengar declared "There’s a brick wall in front of M&A activity."

  • Scott Barshay, Chair of the Corporate Department at Paul, Weiss, Rifkind, Wharton & Garrison, said the current regulatory regime led by Jonathan Kanter at the DOJ and Lina Khan at the FTC was having a major impact on the deal landscape and predicted the M&A market would start to rebound only at the end of 2023.

  • Sullivan & Cromwell’s Audra Cohen argued companies’ efforts to alter their bylaws amidst activist attacks often left them in complicated litigation, distracting executives and advisors from more effective activist defense tactics. 

  • Interestingly, the SEC’s Associate Director of Corporation Finance, Ted Yu, told the panel the emergence of the universal proxy card has thus far not reduced the costs of running an activist campaign, despite predictions to the contrary by governance experts.

By the Numbers

Twitter Blues

Many prominent Twitter users and tastemakers are no longer verified on the platform as of April 20—and they seem to share a widespread sentiment that they do not intend to subscribe to Twitter Blue to keep the check mark.

This move is significant and has the potential to influence Twitter’s efficacy and impact as a platform. 

Among those users who lost their verification status, we are seeing somewhat of an "anti-influencer" reaction — individuals who are outspoken and almost proud of this change. We are also seeing several brands react in different ways:

  • Some organizations have adopted the new verified approach (i.e. The Washington PostThe White HouseMTV, etc.) and signed on as official organizations. It is unclear if they are paying for their status at this time. 

  • Some organizations are remaining on the platform but have seemingly opted to not seek verified organization status (i.e. The New York TimesBoston GlobeCoca-ColaJetBlue, etc.) despite some peers opting in. 

  • Some organizations have decided to leave the platform entirely or pause their official use of the platform (i.e. NPRCBC, etc.) due to concerns about brand verification.

  • Some organizations and individuals have also reported receiving verification checkmarks without applying or any additional context. In response, some users in that group have tweeted publicly that they have not applied or paid in response. 


So far, there is no legitimate widespread prediction of a mass exodus from the platform. But these next few weeks will be crucial. Brands and organizations should remain mindful as the removal of verified check marks may lead to increased misinformation, identity confusion, viral communications crises and/or public harm. 

Find our tips for navigating these and other Twitter changes here.

Walking the China-EU Tightrope

As a result of China’s stance on Russia’s invasion of Ukraine, European distrust of China is on the rise. With complex economic ties at play, the EU is pursuing a delicate balancing act to prevent further deterioration of relations. 

For the first time since the outbreak of the Covid pandemic, European Commission President Ursula von der Leyen joined French President Emmanuel Macron on a visit to China earlier this month, where they aimed to use China’s influence over Russia to bring it to the negotiating table. 

However, these two leaders have different approaches to European relations with China. Von der Leyen recently called on Europe to reduce perceived dependencies on China’s economy. Her goal is to see Europe "de-risk" its economic relationship by tightening scrutiny of investment flows and trade in sensitive technologies with China while abstaining from outright restrictions on trade and investment. 

Macron, however, wants to leverage EU-Chinese relations as a mitigating, de-escalatory force. A large delegation of French business representatives accompanied Macron to China, in the hopes that economic ties will help stabilize the relationship and even incentivize China to modify its stance on the war in Ukraine. His subsequent comments that Europe should distance itself from tensions between the U.S. and China over Taiwan, and pursue more strategic autonomy, ignited criticism across the EU and overshadowed the visit itself.

As these diverse and even conflicting goals shape European rulemaking, companies will need policy and organizational resilience. Within the framework of the EU’s balancing act, changes in policy and in rhetoric will be numerous, and businesses need to hedge their operations against potential risks. It is crucial that company leadership have the capacity to understand current geopolitical developments, and adapt their strategy and business models accordingly.

April 25, 2023
By Nedra Pickler and Irene Moskowitz
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