USA TRENDS AND DEVELOPMENTS Contributed by: George Casey, Heiko Schiwek, Elena Rubinov, Pierre-Emmanuel Perais, Clara Pang and Gregory Gewirtz, Linklaters LLP
Linklaters LLP 1290 Avenue of the Americas New York, NY 10104 USA Tel: +1 212 903 9000 Web: www.linklaters.com
Innovation Driving Tech M&A Technological innovation is driving deal mak- ing in the USA, not only among traditional tech companies but across all sectors, such as retail, manufacturing, finance, healthcare, sup- ply chain, energy storage and infrastructure. Through cross-industry acquisitions, non-tech companies are seeking modernisation as effi- ciently as possible to adapt to a rapidly chang- ing market and industry conditions. Non-tech companies are leveraging the ability to access advanced R&D capabilities and develop new products and services by acquiring tech start- ups or established tech companies. A broader range of potential acquirers therefore exists for tech company targets, and may continue to grow, despite ongoing uncertainty around inter- est rates, inflationary pressures and the global political environment. Tech M&A provides non-tech companies the means to quickly adopt and integrate new technologies and software in order to modern- ise their operations and stay competitive in an increasingly digital landscape. A non-tech acqui- ror can expand with new technological advances via a transaction, as opposed to the expensive and time-consuming process of attempting to develop it organically. AI, machine learning and data analytics are pop- ular areas of tech investment. There is strong
consensus on the significant value being placed on the future of AI. In the first half of 2024, North American AI company deals totalled USD12.8 billion – up 57% from the same period the previ- ous year – with an expectation that AI deals will continue through the end of the year as compa- nies seek to land talent and start-ups search for capital. On a global level, the USA is expected to account for the largest AI market share due to the widescale adoption of AI technology in several industries (eg, healthcare, automotive, retail) as well as the strong presence of popular AI vendors, including NVIDIA and Intel. Examples of recent, significant cross-industry acquisitions include Synopsys’ proposed acqui- sition of Ansys (involving Synopsys’ semicon- ductor electronic design automation solutions and Ansys’ simulation and analysis capabilities) and Cisco’s USD28 billion acquisition of Splunk to combine AI with cybersecurity and cloud technologies. Cross-Border Tech Transactions Although cross-border tech M&A has seen a decline in recent years with increased scrutiny of foreign investment, acquirers are continuing to look across borders for the best-value tech deals. US export control regulations can also affect foreign investment in US businesses, or can restrict their ability to export or otherwise
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