Worldwide, 2016 has been a politically impactful year. In the United States, a controversial presidential election resulted in the unexpected election of Donald Trump. Across the pond, the United Kingdom voted to separate itself from the European Union , resulting in Brexit. Europe saw its own political battlegrounds with the Italian referendum and the French and German national elections. Furthermore, Central and South America faced falling oil prices and changes in U.S. monetary policy. These events had a huge impact on the M&A market by reducing investors’ confidence, which resulted in a decline in the volume and value of deals, compared with the huge numbers in global mergers obtained in 2015.
A Walk Through 2016 Global M&A
Facebook Versus German Hate Speech Laws
Facebook in Germany is a test case globally on how social media should respond to inappropriate and illegal content. Chancellor Angela Merkel and Justice Minister Heiko Maas are demanding that Facebook monitors the content published in its network and deletes unlawful content within 24 hours.
Trump Victory Could Spell Defeat for EU-U.S. Trade Deal
The result of the 2016 presidential election was surprising to many, and disastrous for some. The media focused its attention on social issues, religious freedoms, and healthcare proposals, while foreign trade policies took a backseat during the presidential campaign. However, President-elect Trump was also explicit about his stance on trade. On the campaign trail, Donald Trump labeled the North American Free Trade Agreement (NAFTA) as the “worst trade deal ever” and has blamed the NAFTA for the loss of many American jobs.
“Brexit” Concerns Could Prompt M&A Migration
International banks have traditionally concentrated their European dealmakers in London, but after the United Kingdom’s vote to leave the European Union (“Brexit”), it is unclear whether and how much transactional activity will shift out of the U.K. The German deal market is heating up and banks are subtly shifting bankers to satellite offices in Frankfurt, indicating that Germany is in a position to absorb British banking activity.
Foreign Business Worries Over Strict Chinese Cybersecurity Law
China may have added to the so-called “Great Firewall of China,” on Monday, November 7, 2016, by passing a new cybersecurity law, all part of a broader effort to define how the Internet is managed inside China’s borders. The legislation, passed by China’s largely rubber-stamp parliament, is set to take effect in June 2017. President Xi Jinping has focused Internet policymaking on so-called “cyber-sovereignty” throughout his administration. Since the advent of the Internet, the government of China has created sixty Internet regulations, many of which involve blocking Internet content or monitoring Internet access for individuals.
22 Lotte Group Officials Indicted by South Korean Prosecutors
On October 19, 2016, South Korean prosecutors announced the indictment of 22 Lotte Group officials, including the chairman, for embezzlement, tax evasion, and other corporate malfeasance following a four month corruption probe.
EU Opens In-Depth Antitrust Review of Merger between London Stock Exchange and Deutsche Börse
European antitrust regulators announced on September 28, 2016 that they would open an in-depth investigation into the proposed all-stock merger between the London Stock Exchange (LSE) and Deutsche Börse (DB). If the merger goes ahead, LSE shareholders will own 45.6% of the new holding company with the rest being held by DB shareholders. The $28 billion deal was first discussed in May 2000, but the parties didn’t reach a final agreement until March of this year. Shareholders from both exchanges approved the deal in July. The deal is expected to produce £215 million in annual cost savings over five years.
Vitamin C Antitrust Judgment Overturned
Tech Giants Invest in Local Cloud Infrastructure to Build Credibility in Europe
Silicon Valley’s tech giants, including Apple, Facebook, Microsoft, Amazon, and Google, have recently invested billions of dollars into Europe’s cloud market. Amazon, already running data centers in Germany, is planning on opening additional centers in France and Great Britain. Google is also opening a new data center in the Netherlands, adding to its already existing centers in Finland and Belgium. Apple, Facebook, and Microsoft are also working on similar projects. In doing so, these tech giants foster benefits for both themselves, their European customers, and the economies of European nations.
Controversial EB-5 Investment Program Extended until December
After almost expiring last month, Congress renewed the EB-5 Immigrant Investment Program – which provides U.S. visas in exchange for large investments in U.S. businesses – until December 9. Although touted to create jobs where they are needed the most, allegations of fraud have marred the program’s effectiveness and caused some to question whether it should exist at all.