M&A - Recent Developments and 2025 Planning

The M&A landscape continues to evolve with early indicators showing strong promise that 2025 will offer increased deal-making in Ireland.

We highlight some developments from 2024 and key trends shaping the corporate and transactional space, offering practical insights for businesses and investors looking to capitalise on upcoming opportunities.

The enforceability of M&A non-compete clauses under scrutiny

There has been increased scrutiny on the enforceability of non-compete clauses in corporate transactions. A recent UK court decision reinforced that these clauses must be carefully drafted and tailored to the individual circumstances of the relevant business. Overly broad or unreasonable restrictions are likely to be struck down.

Businesses considering acquisitions should assess whether the enforceability of restrictive covenants might impact post-transaction strategies. Tailored legal advice will be crucial to mitigate potential risks in this area.

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Shifts in financial services M&A

The financial services sector saw increased M&A activity in 2024, spurred by digital transformation and increasing regulation. Acquisitions of fintech companies and consolidations in the insurance sector were particularly noteworthy.

This trend reflects broader market dynamics, including a push for scale, technological advancement, and regulatory resilience. Businesses operating in this space should anticipate continued consolidation, with buyers focusing on acquiring innovative capabilities and navigating complex compliance landscapes.

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Warranty and indemnity insurance

The growing reliance on warranty and indemnity (W&I) insurance in M&A transactions was a notable trend in 2024. W&I insurance can provide protection for buyers and sellers against breaches of warranties and/or indemnities in M&A transactions, while also avoiding the need for escrow arrangements.

It is important when taking out a W&I policy, that the contractual terms are carefully drafted, closely analysed and the extent of cover and any exclusions are clearly understood. Care should be taken to ensure there are no inconsistencies between the insuring clause or cover spreadsheet of a policy and any exclusion clause.

For buyers, ensuring clear policy terms and actively engaging with insurers during the negotiation process can mitigate risks. Sellers, on the other hand, should focus on robust disclosure processes to minimise potential exposure.

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Looking ahead to 2025

As 2025 approaches, we are optimistic for increased M&A activity, driven by greater political and economic clarity following the US and UK elections.

US acquirers are likely to target Ireland's technology and medtech sectors, while increased private equity activity signals heightened competition for transformative and consolidation opportunities.

Innovation will remain a major driver, with a focus on digital transformation, fintech, AI, and green technologies. Meanwhile, Ireland’s forthcoming foreign investment screening regime will add a new regulatory dimension for investors.

For strategic advice and support in navigating these trends, our Corporate and Mergers & Acquisitions teams are available to help you in 2025.

The content of this article is provided for information purposes only and does not constitute legal or other advice.