
Washington, D.C., is grappling with a significant breach of national security. Reports reveal that Jeffrey Goldberg, the editor-in-chief of The Atlantic, was inadvertently added to an 18-member Signal messaging group that included senior government officials such as Vice President JD Vance, National Security Adviser Mike Waltz and Secretary of State Marco Rubio. Before long, classified military plans involving strikes on the Iran-backed Houthis in Yemen were leaked, exposing critical details ahead of the operation.
While this misstep was political in nature, it shines a light on the broader issue of leaks — and their consequences. Just like in politics, leaks in mergers and acquisitions (M&A) can have far-reaching impacts, from affecting deal premiums and completion timelines to undermining trust and reputations in the market.
At SS&C Intralinks, we investigate the nature and implications of M&A deal leaks in our annual M&A Leaks Report. Our latest findings, produced in association with the M&A Research Centre (MARC) at Bayes Business School, City, University of London, reveal fascinating insights into how leaks continue to shape the M&A landscape at a time when confidentiality is more critical than ever. Let's explore what they mean for today’s dealmakers.
What are M&A deal leaks, and why do they happen?
An M&A deal leak occurs when sensitive information about an impending transaction is disclosed — either intentionally or accidentally — before an official announcement. These leaks might involve details about takeover bids, negotiation strategies or even future operational plans.
Sometimes leaks are deliberate attempts to influence the outcome of a deal, while other times they’re accidental and caused by lax information security protocols. Regardless of origin, the consequences can be severe.
Much like the leaked military plans from D.C., M&A leaks expose parties to heightened scrutiny as well as potential misconduct and loss of competitive advantage.
"Looking back at data going back to 2009, it's remarkably consistent in terms of the result of how many leaks take place,” says Professor Scott Moeller, founder and director of MARC at Bayes Business School.
“In fact, it's about one in every 12 deals [that] has some sort of leak event prior to the deal announcement and that's quite significant. What's a good reason? A good reason might be that you want to get more bidders for the company. Bad reason is that you left the papers on the back of the taxi, and the taxi driver calls up the Wall Street Journal and says, ‘I found this, and [the deal] leaks to the press.’"
Eye-opening regional and sector trends in M&A deal leaks
According to our latest research, deal leaks remain stubbornly persistent. Despite regulatory efforts and secure technologies, 8.6 percent of all deals in 2022 were leaked prior to announcement, a level that has remained consistent over the last decade.
Different regions and industries experience varying levels of leak activity.
- France leads globally, with 22.2 percent of M&A deals involving leaks in 2022. South Korea and Japan followed closely.
- By sector, Retail tops the list with the highest rate of leaks (24.3 percent), fueled by growing scrutiny of changing consumer trends and environmental, social and corporate governance (ESG)-focused transactions. Technology and Industrials also recorded elevated leak activity.
These differences suggest that cultural factors, competitive intensity and varying regulatory environments may drive leak trends across regions and sectors.
The costs and opportunities of leaked deals
The impacts of leaks are far-reaching, influencing everything from transaction timelines to deal premiums.
- Faster completion times: Leaked deals closed 15 percent faster compared to non-leaked deals (a median of 80 days versus 94 days). While acquirers rush to fend off competing bidders, this speed can sometimes come at the expense of thoroughness.
- Higher premiums: Targets often use leaks as leverage, compelling acquirers to increase offer prices. On average, leaked deals demanded higher premiums in 2022, driven by heightened competition and the spotlight leaks attract.
While these figures underscore the urgency leaks introduce, they also demonstrate the potential for opportunistic outcomes.
Tips to mitigate M&A deal leaks
Leak prevention is not just the regulator’s job. Here are actionable strategies deal teams can adopt to safeguard sensitive information during transactions:
Enhance information security
- Leverage tools like virtual data rooms (VDRs) with advanced access controls and monitoring.
- Regularly audit communication channels for vulnerabilities.
Set the tone at the top
- Leadership must emphasize collective accountability and the importance of confidentiality.
- Adopt a proactive, not reactive approach with clear communication strategies across stakeholders.
- Craft effective non-disclosure agreements (NDAs) and include penalty clauses that hold external advisors accountable for leaks.
- Consider increasing diversity in board-level decision-making to improve governance and reduce accidental disclosures.
Why this matters now
Whether it’s geopolitics or global business deals, leaks carry risks both apparent and hidden. The insights from our latest 2024 M&A Deal Leaks Report reveal that preventing leaks is as much about culture and governance as it is about technology.
For dealmakers, safeguarding information isn’t just about avoiding embarrassment or regulatory penalties. It’s about protecting shareholder value, ensuring fair markets and maintaining competitive advantages and reputations.
Want to dig deeper into the trends shaping M&A and glean actionable strategies to prevent leaks? Download the full report here.