BRG Report: M&A Disputes Expected to Increase Globally in Challenging Deal Market

Digital assets and energy sectors ranked top dispute areas for 2024.

Key takeaways include:

• Digital assets and services will be the leading area for M&A disputes thanks to turbulence in the cryptocurrency market, from major crypto figures pleading guilty to criminal charges to Bitcoin's price skyrocketing, with more disruptions expected in 2024.
• The Europe, Middle East and Africa (EMEA) region is expected to lead dispute volume; EMEA also led when it came to increases in M&A dispute volumes in 2023. Dealmakers cite legal structures across the region as a major cause.
• Environmental, social and governance (ESG)–related M&A disputes are on the rise amid a range of challenges, from ESG claims around sale terms and greenwashing to data privacy and employment-related issues like fair pay and equal employment opportunities. Respondents expect regulatory scrutiny and political and investor pressure around ESG to further increase in 2024.

Global dealmakers expect more mergers and acquisitions (M&A) disputes in the year ahead as high interest rates, financing challenges and other pressures cast a persistent shadow over the deals landscape, according to the recently released Berkeley Research Group (BRG) M&A Disputes Report 2024. Those conditions are wreaking havoc on business calculations, deepening the risk of disputes over earnouts and other M&A provisions as parties seek to limit risk or recover value from transactions.

Nearly 6 in 10 of M&A practitioners and lawyers surveyed saw more disputes in 2023 than in 2022, and 65% expect both average dispute volume and value to increase in 2024. These results come as regulatory and geopolitical pressures add to dealmaking challenges.