2020 M&A Annual Review

• Fiduciary Duties. The boards of both the buyer and the seller must consider their fiduciary duties in connection with any M&A transaction. The public benefit corporation and some state laws expressly permit, or even require, a board to take into account interests beyond those of its shareholders. M&A IN ASIA 9 Continued U.S. Take-Private Activity by U.S.-listed Chinese Issuers. U.S.-China trade tensions and national security-related restrictions in the U.S. reached a crescendo in 2020. In December, the U.S. adopted the Holding Foreign Companies Accountable Act (“HFCA”), which requires public companies and their accounting firms to make audit papers available for inspection by the PCAOB or face delisting. While most delistings under the HFCA would only occur after five years, it is anticipated that more Chinese issuers may pre-emptively delist in the U.S. as a result of the HFCA as well as the deterioration of broader U.S.-China relations. We anticipate private equity sponsors will continue to step in to help finance take-private transactions to facilitate such delistings. 10 China Looks to Its Neighbors for Technology and Data-Related Acquisitions. While the new administration in Washington may temper some of the more eye-raising optics of U.S.-China tensions, the trend of decoupling, including in TMT, healthcare, and other data-intensive industries, is expected to continue. Chinese companies are continuing to look to alternative jurisdictions such as Japan and Korea as targets and partners. For example, in 2020, Ping An Insurance of China entered into joint ventures with Shionogi in Japan (rather than a U.S.-based pharma) to develop a data-driven drug discovery platform and build AI-enabled manufacturing and quality control systems. Southeast Asia M&A Poised to Grow. Despite fundraising difficulties for SE Asia PE/VC funds in 2020, investments by such funds in recent years have produced a number of growth-stage companies and unicorns in the region, including in healthcare, data centers, and other incumbent industries transformed by digitalization during the pandemic. As China experienced a few years ago, consolidation in the sector is expected. Furthermore, multinational corporations have been increasingly looking to SE Asia to diversify their supply chain, and at the time of publication, Singapore is coming out from its pandemic “circuit breaker” measures. We expect SE Asia to be an active destination for investments in 2021. These factors are expected to result in consolidation over the course of 2021. 1. “Global Mergers & Acquisitions Review, Full Year 2020,” Refinitiv. 2. “Global & Regional M&A Report 2020,” MergerMarket . 3. “Global & Regional M&A Report 2020,” MergerMarket . 4. “Global & Regional M&A Report 2020,” MergerMarket . 5. These and other factors are reflected in the expectations of tech M&A dealmakers. Please see our survey results, “ MoFo Survey: Tech M&A Leaders Overwhelmingly Bullish for 2021 Amid ‘COVID Comeback , ’” released on January 12. 6. AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC (Del. Ch. Nov. 30, 2020); Fairstone Financial Holdings Inc. v. Duo Bank of Canada 2020 ONSC 7397 (Dec. 2, 2020). 7. https://www.lazard.com/media/451406/lazards-q3-2020-review-of- shareholder-activism.pdf 8. Deal Point Data. 9. https://www.ftc.gov/news-events/press-releases/2020/09/ftc-doj-seek- comments-proposed-amendments-hsr-rules-advanced 10. See our prior client alert, Coming Home – Overview of Going Private Transactions of U.S.-Listed Chinese Companies | Morrison & Foerster (mofo.com) Chinese companies are continuing to look to alternative jurisdictions such as Japan and Korea as targets and partners. MORRISON & FOERSTER 2020 M&A ANNUAL REVIEW 9