USA – NEW YORK Trends and Developments Contributed by: Pieter A. Weyts, Nicolas Teijeiro, Corina Gugler and Sofía Yagüe, Next Legal
detection capabilities or other competitive advantag- es, ensuring both strategic alignment and financial predictability. Similarly, in robotics, firms with propri- etary automation technologies that complement exist- ing product lines or enable expansion into adjacent markets are a common theme. Many smaller start-ups that could be struggling with venture capital (VC) funding are increasingly viewing M&A as an attractive exit strategy. For early-stage companies, strategic buyers can provide needed cap- ital as well as access to talent, distribution networks and regulatory compliance expertise, all of which can jump-start accelerated scaling. Examples include healthcare AI start-ups selling to major hospitals or health tech conglomerates, or SaaS analytics plat- forms merging with larger enterprise software provid- ers to expand footprint and credibility. Cybersecurity and data analytics transactions are also on the rise, with corporate acquirers prioritising operational resil- ience and risk management capabilities in potential targets. Buyers are also considering joint ventures and stra- tegic alliances, particularly where regulatory, intellec- tual property (IP) or cross-border roadblocks make a full acquisition undesirable or too complex. US tech firm may enter a joint venture with a Latin American partner to gain market access while avoiding immedi- ate foreign ownership restrictions, or may choose to license core IP rather than acquire it outright to reduce integration risk and compliance burdens. Its growing tech ecosystem positions New York as a natural hub for tech M&A, where innovation meets complex financial structuring capabilities and oppor- tunities. New York City’s unique access to both capital and talent enables acquirers to integrate new technol- ogies quickly, while maintaining proximity to financial institutions and other capital providers. Risk and Compliance As momentum builds, buyers and sellers are well advised to double down on their due diligence efforts to effectively manage regulatory risk and compli- ance issues, with heightened focus on IP, cyberse- curity, trade secret protection, data privacy and trade
compliance matters. Particular due diligence matters include reviewing: • existing trade secret protections; • internal access controls; • employee confidentiality agreements; and • compliance with cross-border data transfer laws. Companies must also ensure alignment with indus- try-specific regulatory frameworks, such as Securi- ties and Exchange Commission (SEC) regulations in fintech and crypto, as these can materially affect deal risk and valuation. Data privacy diligence has expanded to cover not only historical compliance but also anticipated requirements under evolving US and state-level frameworks, including international privacy obligations for cross-border users. From a legal and contractual perspective, risk alloca- tion and regulatory compliance have become central in deal negotiations and representations and warran- ties drafting, particularly in unsettled areas of law such as fair use in AI training. Valuations have also evolved to better appraise the value of intangible assets such as datasets and algorithms. All of this increases the importance of contract drafting in M&A. No strategic buyer or seller should approach a transaction unpre- pared, or worse, leave it to its AI chatbot of choice to draft sophisticated and fact-specific transaction documents. While merger review by the Department of Justice (DOJ) and the Federal Trade Commission (FTC) has taken on a more traditional stance under the second Trump administration, big tech continues to be an enforcement priority in the United States, so parties should remain strategic in navigating the current regu- latory landscape. Where appropriate, buyers and sell- ers ought to engage with the agencies to proactively address any concerns and mitigate the risk of delays, rather than holding out hope of surfing through. In New York, local regulatory bodies such as the Depart- ment of Financial Services (NYDFS) and the Attorney General’s Office play a critical role in scrutinising tech- nology and financial services transactions, particularly with respect to cybersecurity, consumer protection and antitrust considerations.
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