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Elon Musk terminates $44 billion Twitter deal!

Elon Musk terminates $44 billion Twitter deal!

After months of contentious back and forth, Tesla CEO Elon Musk has reportedly decided to abandon his $44 billion Twitter takeover altogether.

Why did the deal fall through?

In a recent filing with the US Securities and Exchange Commission (SEC), the Tesla CEO claimed that Twitter had breached their M&A agreement, failing to provide him with necessary information on fake or spam accounts on the microblogging platform.

Another reason that Musk gave for his decision to pull out of the buyout was the firing of several senior Twitter executives and employees that violated its obligation to ‘preserve the current state of the business.’

What happens next?

Musk’s sudden decision to abandon his already controversial Twitter deal was understandably not received well. He is in for a hefty legal battle with Twitter, as the latter has already hired a top New York-based firm to file its lawsuit.

Mergers and Acquisitions are some of the most complicated financial transactions out there. These deals go through various pitfalls before they cross the finish line.

So the question is, can M&A agreements be insured?

Yes- through Representations and Warranties Insurance!

These policies are extensively used in M&A agreements to protect against losses arising due to breach of contract by either party.

Every transactional agreement has certain contractual guarantees attached to it that establish the mutually agreeable conditions under which a sale can be made.

Representations and Warranties Insurance essentially helps transfer the risk of any breach of such guarantees to the insurance company, thereby facilitating negotiations between the buyer and seller.

These policies can be extremely effective in aiding M&A agreements, acting as a win-win for both parties.

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