USA – TEXAS Trends and Developments Contributed by: Soren Lindstrom, Pierson Ferdinand LLP
How Texas Is Building an End-to-End “Corporate Ecosystem” to Compete with Delaware Texas M&A is no longer just the story of companies moving operations to the state. It is increasingly the story of Texas becoming a place where companies operate, incorporate, litigate, raise capital, and exit, all within one co-ordinated ecosystem. This matters for M&A lawyers because it changes: • where targets are formed; • which law governs internal affairs; • which forum hears post-closing disputes; and • how boards of directors think about the long-term corporate “home base.”Below is a practical, deal- oriented overview of the trends driving Texas M&A, the business-friendly (and increasingly Delaware- competitive) legal/tax environment, the emerg - ing role of the Texas Business Court, including a deeper look at recent M&A-adjacent decisions, and the Texas Stock Exchange as a new piece of infrastructure. The Economic Backdrop: Texas as a Sustained Deal Engine Texas continues to benefit from a rare combination of scale + growth + sector diversity. It remains a centre of gravity for energy and industrial services, but also for technology, logistics, healthcare, defence, and advanced manufacturing. That breadth of industry is important for the state’s economy and M&A because when one sector softens, others often keep the deal market moving. From an M&A perspective, a booming Texas economy tends to generate four recurring deal patterns: • founder and family business exits as companies professionalise and institutional capital seeks plat - forms; • private equity roll-ups in industrial services, energy services, healthcare services, and niche manufac - turing; • infrastructure and energy transition transactions, including midstream, power, renewables-adjacent services, and data centres; and • cross-border transactions tied to supply chain rea - lignment and Texas’ proximity to Mexico and Latin America.
Texas also benefits from a board-level narrative that is easy to explain: growth markets, favourable cost structure, talent pipelines in major metros, and gov - ernance/tax predictability. That predictability is what Texas is now trying to expand from “doing business” into “being the corporate domicile.” The Business-Friendly Corporate and Tax Environment Constitutionally Reinforced Tax certainty as a governance feature Texas has long been a low-tax state as: • there is no state personal income tax, and the Texas Constitution requires voter approval before any personal income tax could take effect; • there is no state-level capital gains tax, and Texas voters approved a constitutional amendment in 2025 prohibiting a Texas tax on realised or unreal - ised capital gains for individuals, families, estates, and trusts; and • there is no Texas estate or inheritance tax, and Tex - as voters approved a 2025 constitutional amend - ment prohibiting taxes on a decedent’s property or estate transfers (inheritance, legacy, succession, or gifts). Texas still has the franchise tax (so “no corporate income tax” does not mean “no entity tax”), but for many owners and investors the big story is the consti - tutional entrenchment of several “no-tax” categories, making Texas feel less like a policy choice that could flip and more like a durable feature that boards can plan around. That matters in M&A because tax predictability becomes part of the sale story and the post-closing retention story. Corporate law modernisation: Texas is explicitly courting Delaware’s “corporate home” business In 2025, Texas passed a set of widely discussed reforms (notably via SB 29) designed to make Texas more attractive as a place to incorporate or redomi - cile, openly framed as a response to Delaware’s domi - nance. Commentary on these changes consistently emphasises codifying the business judgment rule, raising barriers to certain shareholder suits, tightening
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