Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How the Exchange Ratio Trap Soured a Mega-Merger
Lucas and Luna dissect one of the trickiest structural pitfalls in stock-for-stock M&A: the exchange ratio trap. Using the 2021 merger of Aon and Willis Towers Watson as their case study, they explain how fixed exchange ratios can destroy value when a buyer's stock drops before closing. Lucas walks through the mechanics—including the collar protection that was notably absent from this deal—and why a floating ratio isn't a cure-all either. They discuss how the deal's failure reshaped how big advisory firms now draft merger agreements, and what middle-market operators should…
The skinny
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