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Lazard’s 2017 Activism Year in Review

Lazard’s year-end report on shareholder activism compiles and analyzes data on key activism trends globally.

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Key observations from the 2017 year-end report include:

  • Activists deployed a record amount of capital in 2017, leveraging their credibility with traditional shareholders and access to large pools of capital to attack the largest companies globally 

$62 billion deployed by 109 activists across 194 campaigns globally in 2017, more than double the total capital deployed in 2016

Activists won an additional 100 board seats in 2017, raising their five-year total to 551

 

  • Campaign activity surged in Europe, driven by prominent U.S. activists turning abroad to find comparatively attractive valuation entry points and potentiallow hanging fruit for operational and strategic actions to enhance shareholder value

Capital deployed in Europe increased to $22 billion in 2017, more than double the average of $10 billion deployed over 2013-16

Nearly 30% of campaigns in 2017—a 65% increase compared to 2013-16—were against European targets, with U.S. activists

  • High-profile proxy fights highlighted the increased independence and changing temperaments of large institutional investors, especially index funds  

The expanding influence of BlackRock, State Street and Vanguard continued to be felt across the governance landscape, from public statements by the firms’ CEOs on investment stewardship principles to more aggressive stances taken on gender diversity and climate risk

  • The nexus between activism and M&A grew stronger, with the attractiveness of event-driven returns encouraging activists to assert themselves as a key player on the M&A chessboard and raising the appetite of strategic acquirers to adopt activism as a tactic

Activist agitation led to numerous strategic and sale processes as the “fix” for underperforming businesses and acquirers leveraged the disruption created by activism

Acquirers leveraged the disruption created by activism, viewing it as creating the opening for a takeover

Shareholder pressure resulted in the scuttling or sweetening of M&A deals that were poorly received by investors 

 

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