M&;A, traditional guarantees collapse and risks shift to insurance

Indeed, the study shows that 32% of 2025 deals are now structured in a 'no survival' mode for the general representations of the seller. In other words, an increasing share of sellers obtain an almost immediate clean exit, drastically limiting their liabilities after the deal closes. Particularly for private equity operators and M&A advisors, the trend has significant implications: on the one hand, the speed of deal execution increases and the so-called negotiation friction is reduced; on the other hand, the risk is 'financialised', i.e. it is redistributed towards the specialised insurance market.

The report also highlights how many clauses traditionally considered to be subject to intense negotiation are converging towards increasingly homogeneous market standards. The mmaterial adverse change clauses (material adverse event, change or circumstance that materially affects the target company, its business, financial condition or prospects), for example, appear in 95% of 2025 deals, either as stand-alone (stand-alone) or indirectly (back-door).

Exclusions (carveouts) included in the definition of material adverse effect, that is, clauses specifying which adverse events are not considered material enough to constitute an MAE for contractual purposes, are present in 96% of deals. Also materiality scraps (mechanisms that neutralise materiality thresholds for indemnity purposes) remain widespread: they are included in 83% of 2025 deals.

M&A documentation is becoming increasingly standardised and modelled on insurance parameters and underwriting requirements. As a consequence, there is less work for both legal advisors and financial advisors during negotiations.

One of the most interesting aspects, however, concerns cyber and privacy, areas that have become central to due diligence in recent years. Data protection declarations and guarantees are now almost universal, present in 98% of 2025 transactions. More surprising, according to the analysts who compiled the report, is the figure for declarations by which a party attests to the robustness of its IT and cybersecurity systems, the absence of significant breaches or attacks, and compliance with applicable data and IT security standards and regulations. The latter dropped from 95 per cent of deals in 2024 to 78 per cent of deals in 2025, against a backdrop of increasing sophistication of cyber attacks and their frequency. The figure may indicate that cyber risk is increasingly being managed outside of traditional contracts (share purchase agreements), through dedicated technical diligence and specialised insurance contracts, rather than through extensive contractual guidance.

The report also portrays a market that is still strongly protective of buyers on some key issues. Representations and warranties of regulatory compliance (compliance with laws representations) are present in 99% of deals. no-shop/no-talk clauses, whereby the seller undertakes, respectively, not to solicit offers from third parties and not to engage in negotiations or discussions with other potential buyers during the exclusivity period with the buyer, appear in 91% of deals.

On the indemnity obligation side, the most frequent exclusions from the liability caps continue to relate to fraud, tax, capitalisation and due diligence on the relevant authority/approval.In parallel, the market confirms the increasing centrality of insurance cover in the economic structure of transactions. In 2025, 44% of all deals will no longer have a general guarantee mechanism through escrow or retained indemnity, up from 41% in 2024 and 33% in 2023. For private equity funds, the benefit is clear: greater certainty of execution, faster distributions to their investors and less tied-up capital post-closing. The overall result is an increasingly 'institutionalised' middle market, where private deals begin to resemble public markets in terms of speed, liquidity and risk transfer.