Structuring Deals: Uncovering Tax and Structuring Strategies in M&A and other Public Transactions

Structuring Deals: Uncovering Tax and Structuring Strategies in M&A and other Public Transactions

Mr. Davis Wang, Mr. Avi Alter
Spring 2022 course
W 4:15pm - 6:15pm
2 classroom credits

Prerequisites: Taxation and Taxation of Business Corporations.

Exam Type: One-Day Take Home

The course will explore how Federal income tax considerations and related structuring considerations shape today’s deals, including mergers, acquisitions, restructurings, public offerings and other landmark corporate transactions. Students will study SEC filings related to these transactions in order to discover the strategies behind their particular form and structure. The course will be presented from the vantage point of legal and financial advisors to the transaction, so that students will become familiar with the framework that governs these corporate transactions, with a particular focus on “real world” approaches and strategies—how abstract principles are applied in practice and how ambiguities and uncertainties are resolved (or managed). In addition to assuming the role of “advisors,” students will explore the role of public filings as the “case law” of public deals and their practical precedential effect, the gatekeeping function of investment bankers and lawyers in a system of voluntary enforcement, the legislative and regulatory responses to publicly announced deals, and the intended and unintended consequences on deal dynamics. The goal of the course is for students to gain a general understanding of the relevant legal and financial concepts, as well as how these concepts create their own body of tax and corporate “lore” (if not “law”) and their normative implications.

The course will take a “case study” approach, by focusing on particular transactions and categories of transactions to explore how themes develop. Relevant tax concepts or statutory provisions will be discussed as relevant to each class, but the focus will be on understanding how such concepts affect structuring of the transaction and the evolution and development of such concepts across multiple transactions. Themes and transactions studied will include, illustratively,

  • Spinoffs I: Yahoo’s attempted spin-off of its stake in Alibaba (tax-free spin-off rules including device, business purpose and the active-trade-or-business requirement; cross-border taxation); Trip Advisor & Trip Advisor Holdings
  • Spinoffs II: Disney’s acquisition of major assets from 21st Century Fox (taxable spin-off; spin-merge transactions; basis step-up)
  • UP-C’s: Blackstone IPO and its reincorporation as a C corporation
  • UP-C’s & Exchangeables: Merger of GE’s oil and gas services business with Baker Hughes (’40 Act considerations; use of partnerships in M&A; tax receivable agreements)
  • Tracking stock: Dell/EMC (use of tracking stock and potential splitoff)

Subject Areas: Business Organization, Commercial Law, and Finance, Taxation