The Twitter v. Musk litigation has probably focused more public attention on a merger agreement than has ever occurred before. The interpretation of the agreement in the case may decide how $20-30 billion worth of value is allocated, as between Musk and Twitter shareholders.
In interpreting the agreement, it is often helpful to know where it came from. Deal documents such as merger agreements are not written from scratch; instead, they are copied from prior deals and modified for the present transaction. In my research, I often trace the lineage of deal documents that results from this copying, with a particular focus on merger agreements, so I thought that experience might be helpful here.
I ran the Twitter Merger Agreement through a large corpus of prior merger agreements that I maintain. The analysis uses word-for-word comparisons similar to those used in plagiarism software to find the likely precedent document. The closest prior merger agreement was the merger agreement from the Stone Point Capital acquisition of CoreLogic, which was executed as of February 4, 2021. That agreement can be found here.
My database of merger agreements contains several thousand agreements from the last four years, but it isn't exhaustive. Accordingly, although it is likely that the CoreLogic document was the precedent for the Twitter agreement, it is not certain. Also, if the CoreLogic agreement was the precedent, the parties made substantial changes in the Twitter deal that may shed light on their intent.
In subsequent posts, I will likely analyze some of the key similarities and differences between the two agreements.
Comments