Mergers & Acquisitions
Amitai Aviram
Spring 2024
Syllabus
Learning Objectives: This course covers the corporate law aspects of mergers & acquisitions (M&A). M&A is usually a major event in the life of a firm. For the acquirer M&A often involves a major change in the scale and scope of business activities, while for the target firm M&A is often an endgame in which shareholders are enticed by generous compensation to part with their investment in the target. For both sides, the stakes are high. Because of the high stakes, corporate clients on both sides of the deal (as well those representing third parties who want to facilitate or thwart the deal, for their own reasons) are willing to pay a high premium for top notch legal representation. This makes M&A an attractive practice area for lawyers as well as a fast-developing field in which creative lawyers constantly develop new legal innovations to help their clients outmaneuver opponents.
At its core, the law of mergers and acquisitions is a high-stakes corporate governance issue: while acquirer and target maneuver against each other, there is also an internal battle between the shareholders and management of each firm. Shareholders need their management to present a united front against potential acquirers, who could otherwise exploit divisions between shareholders to buy the firm for a pittance. But management may have its own incentives, such as keeping their jobs or receiving generous golden parachutes. Shareholders rely on corporate governance mechanisms to keep management accountable, and some shareholders use these mechanisms to leverage their own agendas in the M&A negotiations. For this reason, the first half of the course focuses on mechanisms of corporate governance. We then examine the legal mechanics that are specific to M&A deals (studying applicable Delaware and Federal laws). Finally, we study the practice of M&A deals, from the strategic maneuvering of the various parties ("the M&A dance") to the crafting of the acquisition agreements.
Business Associations is a prerequisite for this course. An M&A practitioner would significantly benefit from knowledge of tax law, antitrust law and laws governing executive compensation, so students planning to become M&A specialists should consider studying these fields either before or after the M&A course. However, knowledge of these fields is neither required nor expected for the M&A course.
My Teaching Style: This course is based on a "flipped classroom" approach that involves listening to a lecture on YouTube before class, and using class time to apply the theoretical material taught in the lecture to specific fact patterns, mostly based on real cases. This means that typically you will not be assigned cases or other material before class (the exception being that occasionally I will ask you to read a "case" – a fictitious fact pattern – before class, to review material we already studied). However, it is crucial that you listen to the assigned lecture before class, as otherwise you would likely not understand the in-class analysis of cases. While I try not to make too many changes in the course during the semester, I occasionally modify the order we cover materials, or the content of a particular class. Please make sure to check the course outline (https://pages.law.illinois.edu/aviram/MA_out.htm) each weekend to confirm that the assignment for the following week hasn’t changed. If I must make more immediate changes, I will notify of them in class.
To keep the lectures short, I took out most cases and examples (leaving this for class time). Unfortunately, this means that the video lectures are densely packed. Please bear with them, and expect that the material will not be 100% clear until we apply the abstract tests in the lecture to actual cases – which we will in class (the alternative was to make pre-class assigned lectures much longer, which I thought would be too demanding on your time and cause some students to skip listening to the lectures). As you listen to the lectures, note the new legal framework that is being introduced (i.e., the legal test), and when this framework applies. In most video lectures, if you understand those two things at the end of the lecture, you have what you need for in-class application of the material.
I use PowerPoint slides in nearly all classes. The slides serve primarily to assist you in reviewing the material after class, and for the exam. During class time, if something I say is unclear, note which slide I am on, and remember to read that slide after class to resolve the confusion (the slides serve during class like bookmarks, to which you can return later). My former students tell me that they liked this system, because it significantly reduced the number of notes they had to take, freeing them to focus on listening and thinking. They also tell me that the slides were a convenient resource for them to review the material after class.
The slides I use in class will be e-mailed to enrolled students at the end of each week (they include model answers to the fact patterns we analyze in class).
Grading: Grades are based on a 6-hour take-home exam that
will take place on the first day of the exam period (the day after Reading
Day). If you are unable to take the
exam on that date, you need to contact my assistant (Kelly Downs, kdwns@illinois.edu) as soon as
possible to request rescheduling your exam on an alternative date.
Specifically, any requests based on a conflict with another exam must be made
by March 15. The only reasons that justify rescheduling an exam are a
direct conflict with another exam, or an exceptional medical or personal
emergency. A direct conflict with
another exam means that you have another exam on the same day (having other
exams on consecutive days does not justify rescheduling the M&A exam).
The exam will be an issue spotter (traditional
essay-type law school exam question), and your answer will have a word limit of
1,000 words.
You will receive the exam question by e-mail from my
assistant (Kelly Downs) at 9am (Champaign time) on the exam day. You should
then answer the exam question on your computer, saving it as a .doc/.docx
(Microsoft Word) file, with the file name being your 4-digit exam number.
You must e-mail that file as an attachment back to my assistant, so that she
receives it before 3pm (Champaign time) on the same day. She will
confirm receipt of your exam by 4pm (so please don't
resend your exam or request a confirmation unless you didn't
get a confirmation by 4pm).
To get a sense of what the exam will look like, you can browse my
Mergers & Acquisitions exams from past years here: https://pages.law.illinois.edu/aviram/Exams.htm (many
years ago, this course was called "Business Associations 2", so you may
see older exams with that course name, but they are essentially the same course
as M&A).
At the
end of the course there will be a class dedicated to exam preparation, and I will
provide more information about the exam in that class.
A student may request to submit a project (e.g., case study, research paper or teaching module) in lieu of an exam, but this may only be done with my advance permission, and I will only give such permission as an exception, when I believe circumstances justify it. Students should not assume they would get such permission (rather, the assumption should be that students must take the exam), so if doing a project rather than an exam is an important factor in your choice of taking this course, you should talk to me before the course begins to see if your circumstances justify permission to submit a project in lieu of an exam.
Course texts: The only text you are required to have for this course is a course materials packet (in PDF format) that will be available free of charge to students enrolled in the course. Since pre-class assignments typically involve listening to lectures rather than reading cases, the "textbook" used in this course is mostly optional. The packet does contain review cases that I occasionally assign ahead of a class, in which case you need to read and attempt to answer the cases before class.
Everything else in the packet, however, is optional supplemental reading that you may choose to read if the material is not clear after class (or if you like to do extra preparation ahead of class). This includes my notes, relevant legislation and case law.
Reaching me: The best way to contact me is by e-mail, at: Aviram@illinois.edu. You are also welcome to meet with me at my office. Simply send me an e-mail suggesting days/times that are more convenient to you and we will find a mutually convenient time to meet.
Do not be shy about scheduling a meeting to clarify something that you did not understand in class. If, despite having read the assigned material and attending class, you are puzzled about some issue that was discussed in class, it is perfectly appropriate for you to schedule a meeting so that I can (hopefully) make things clearer. Out-of-class discussion affords me the luxury of focusing on your individual questions or concerns.
Attendance & participation: The American Bar Association requires accredited schools to ensure the “regular and punctual class attendance” of students. The rule applies to this course. You are expected to be present and prepared for class, and I reserve the right to reduce grades for poor attendance or participation. Being prepared includes two components: familiarity with the assigned reading/video lecture, and making an effort to think about the issues that come up in the assigned reading and in the questions that I ask you in class. Being prepared does not require you to know the correct answers to my questions; just to make your best effort based on the assigned pre-class material. This is not “The Paper Chase” and nobody aces every question they are asked (including the professor).
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