Key takeaways

• Of the 10 largest recently-announced public insurance M&A deals, eight were ultimately all-cash deals and nine involved a buyer that might once have been considered non-traditional.
• Because choosing non-traditional buyers is risky, seller boards sometimes conducted a “reverse” due diligence process to determine if the buyer had the financial resources to consummate the transaction or the sophistication to obtain the necessary regulatory approvals.
• Regulatory risk was sometimes allocated in the terms of the definitive agreement – whether by negotiating a form of regulatory reverse termination fee or by defining the burdensome regulatory conditions that a buyer would not be contractually obligated to accept.
• Seller boards are satisfying their fiduciary duties to seek the best price for the target company through a mix of pre- and/or post-signing market checks.