Antitrust Reverse Termination Fees: 3Q Update

NOTE: An updated version of this post was published on July 20, 2012, and may be found here.

In July, we posted a study and a data spreadsheet on antitrust reverse termination fees in public deals announced from January 1, 2005, through May 31, 2011. Since that time through the end of September, we have added two new deals to the spreadsheet:

Google/Motorola Mobility ($11.9 billion, with a 21% termination fee of $2.5 billion)
Honeywell/EMS Technologies ($510 million, with a 3.8% termination fee of $19.6 million)

With the new additions, there were 57 deals with antitrust reverse termination fees over the period January 1, 2005, through September 30, 2011. These fees have a median of 3.9% and a mean of 5.8%. The higher mean is due to some large outliers, including:

AT&T/T-Mobile ($39 billion, with a 15.4% breakup fee valued at $6 billion)
Google/Motorola Mobility ($11.9 billion, with a 21% termination fee of $2.5 billion)
Smithfield Foods/Premium Standard Farms ($674 million, with a 14.8% termination fee of $100 million)
Monsanto/Delta and Pine ($1.5 billion, with a 39.8% termination fee of $600 million)
Seagate/Maxtor ($1.9 billion, with a 15.8% termination fee of $300 million)

NB: The percentage intervals on the horizontal axis are not of equal size.  

Since January 1, 2005, no reverse antitrust termination fee has been triggered, although consent decrees were entered in 14 of the 52 nonpending transactions.

For the updated data spreadsheet, click here.

Dale Collins
+1.212.848.4127
dale.collins@shearman.com

Resources:
Antitrust Reverse Termination Fees--Data Set (January 1, 2005 through September 30, 2011)

Downloads:
Antitrust Reverse Termination Fees--Data Set (January 1, 2005 through September 30, 2011)

Categories: US Mergers