The Brave New World of M&A and Tax Reform: What Has Changed and How to Improve Deal Values in Domestic Corporate Transactions

June 2018

By Michael Williams (BDO USA, LLP)

Dealmakers are living in a brave new world of tax rules now. Many describe the recent federal income tax legislation as historic—a once-in-a-generation event—but it would also be accurate to describe it as complex, with far-reaching strategic implications for organizations that transcend the tax function. M&A is no exception. Corporate purchasers and sellers in M&A deals may be positioned to take advantage of some of the recent tax changes to improve deal value, maximize income tax savings and minimize tax liabilities.
The changes are generally effective for tax years beginning after 2017. With tax reform of this magnitude, however, it is not possible to touch on all of them, so this article will focus on the five most significant changes influencing domestic M&A transactions involving corporations. It will not address the impact of changes on international income tax matters and cross-border M&A deals, or state and local tax implications.