Tiger Woods and Elin Nordegren, Al and Tipper Gore, Prudential and AIA Group. Breakups seem to be everywhere. With the collapse of the British insurer’s $35.5 billion bid for American International Group’s Asian life insurance arm, deals that came asunder worldwide this year had reached $137 billion by the end of May — almost double last year’s $71 billion. Dealogic reckons that since 2007 some $2 trillion of would-be mergers have come unstuck.
To Michael Aiello, a 41-year-old partner of New York–based law firm Weil, Gotshal & Manges, the implication is obvious: He needs more than ever to shield his merger clients from deals’ collapsing — and from the stood-up party claiming multimillions in compensation. So-called reverse breakup fees can run to 5 percent or more of a deal’s value. ....