Market Trends: What You Need to Know
As shown in the American Bar Association s Private Target Mergers and Acquisitions Deal Point Studies:
Since 2011, the use of after-tax indemnity limitations has steadily decreased, appearing in 32% of deals reviewed in the 2019 study. Notwithstanding potentially limited economic benefits of an after-tax indemnity limitation, these provisions are still seen, though decreasingly so, in M&A transactions.
After-tax indemnity limitations grew in prevalence across the first three ABA studies (2007-2011), to a peak of 53% for deals reported in the 2011 study. However, 2011 was the first and only year that inclusion of the limitations represented the majority position.