INTRODUCTION Contributed by: Frank Aquila, Sullivan & Cromwell LLP
Legal landscape: Delaware developments with global impact Delaware – the corporate home for many multination - al companies – enacted significant reforms in 2025. Senate Bill 21 codified clearer standards for conflict - ed‑controller transactions, introduced bright‑line defi - nitions of control, and imposed more rigorous require - ments for stockholder inspection rights. Judicial decisions further shaped global governance norms. Maffei v Palkon confirmed that board‑led rein - corporation decisions are subject to business‑judge - ment review when adopted on a “clear day”. In re Columbia Pipeline it was clarified that third‑party acquirers face aiding‑and‑abetting liability only when they possess actual knowledge and knowingly par - ticipate in a fiduciary breach. These rulings provide greater predictability for cross‑border deal makers interacting with Delaware entities. Global outlook for 2026: momentum with measured optimism As 2026 begins, global deal makers express cautious but growing optimism. Strategic acquirers remain focused on transformation through vertical integra - tion, digital acceleration, supply‑chain resilience, and portfolio realignment. Boards increasingly view M&A as essential to long‑term competitiveness. Private equity is positioned for renewed deployment as financing markets stabilise and exit activity accel - erates. Continuing geopolitical and macroeconomic risk will inject volatility, but many deal makers see this as an opportunity to acquire undervalued assets, consolidate fragmented sectors, and build long‑term competitive advantage. The year ahead offers significant possibility. With ample capital, strategic clarity, and increasing risk tolerance, global M&A enters 2026 with momentum – and the potential for elevated activity across regions and sectors.
This alignment with global practice provided greater execution certainty for cross‑border public M&A. Government participation in strategic industries One of the most globally consequential developments of 2025 was the expanded willingness of governments – especially the United States – to take direct equity or governance stakes in private‑sector companies. The US government’s USD8.9 billion equity purchase of Intel and its 15% equity stake in MP Materials reflected an increasingly interventionist industrial policy aimed at securing semiconductor and critical‑minerals sup - ply chains. The golden‑share arrangement negotiated in connec - tion with the USD14.9 billion acquisition of US Steel by Nippon Steel further illustrated government readiness to assert governance rights over assets deemed stra - tegically essential. These developments underscore a broader trend: industrial policy, national security, and M&A are becoming increasingly intertwined. Geopolitical tensions and cross‑border M&A Global geopolitical tensions remained a defining force in 2025, influencing valuation, diligence, and trans - action structuring. Tariff volatility reshaped revenue modelling and cost forecasts. New and expanded foreign‑investment review regimes – including CFIUS in the United States, enhanced FDI screening in the European Union, and increasingly stringent frame - works across the Asia‑Pacific region – intensified scrutiny of transactions involving semiconductors, AI, data‑rich businesses, and critical minerals. Buyers incorporated tariff sensitivity into M&A model - ling, adjusting material‑adverse‑effect clauses, earn - out frameworks, and regulatory‑condition provisions. R&W insurers increased scrutiny of supply‑chain resil - ience and export‑control exposure.
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