[Last updated: 1 January 2025, unless otherwise noted]

1.1 Background

The US public merger and acquisition market remains the largest and most active public M&A market in the world. To give a sense of scale, according to Mergermarket, of the approximately US$3.4 trillion of deals globally through December 16, 2024, US deals accounted for approximately half of the total, at US$1.7 trillion. According to DealPointData, completed transactions in 2024 involving US public company targets represented approximately [US$398 billion] in aggregate transaction values, with nearly 150 transactions involving US public company targets ranging from acquisitions of smaller reporting companies for less than US$100 million to, for the largest deal of the year, ExxonMobil’s acquisition of Pioneer Natural Resources for approximately US$60 billion. Deal activity appears across a variety of industry sectors, with the most active sectors in 2024 being technology, healthcare, oil & gas, utility & energy, and finance, per Mergermarket.

The most common structures for US public deals are so-called one-step mergers in which target shareholders vote to consummate a statutory merger of an acquirer's merger subsidiary with and into the target public company, with the target public company surviving as a wholly-owned acquirer subsidiary, and so-called two-step mergers by which an acquirer first consummates a tender offer to acquire a sufficient number of target shares in the target public company in a first step to then permit the consummation of a statutory merger in a second step without a vote of remaining minority target public company shareholders. The US public deal market is highly developed and practice is constrained by a combination of state corporate law (most commonly Delaware), federal securities laws and market practice. As a result of such constraints, US public transactions generally require preparation of detailed disclosure documents describing the proposed transaction and any shareholder votes or tenders required to effect the transaction. Transactions can close quickly and expediently for both US and non-US acquirers from a corporate and securities law perspective; however, the antitrust and foreign investment regimes in the United States and elsewhere frequently introduce longer timelines to closing.

1.2 Scope; foreign private issuers

This chapter discusses select legal, regulatory, timing and practical considerations to assist with consideration of a US public M&A transaction, focusing primarily on state corporate law and federal securities law considerations. While circumstances of individual transactions may vary, this summary generally assumes that the US domestic public company that is the target of a proposed acquisition transaction is a corporation (the general term “public company” is used herein), and therefore that the primary equity-holders of such target public company are “shareholders” or “stockholders” (the general term “shareholders” is used herein).  The discussion in this chapter concerns acquisitions of public companies organized under the laws of one of the states of the United States. It includes a discussion of certain issues under the corporate and case law of Delaware, the jurisdiction of incorporation of a majority of US-organized public companies.

There are also many non-US companies that are listed on US stock exchanges. Such companies are referred to as foreign private issuers ("FPIs"), if they qualify as such under applicable US securities regulations (see “6.1 Tender offer procedures” for additional discussion on determining whether a company qualifies as an FPI). Many, but not all, of the US federal securities laws and rules that regulate acquisitions of listed US companies also apply to acquisitions of US-listed FPIs. In some cases, however, acquisitions of US-listed FPIs are either exempt from such securities laws and rules or are governed by rules dealing specifically with FPIs.