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WSJ has a copy of a memo from M&A uber-lawyer Marty Lipton to clients on the outlook for 2008 M&A activity.

Lipton cites 6 reasons why M&A will continue despite the credit crunch:

• The desire of some countries to create “national champions” in basic industries, and of a
few countries, like Russia, to create “global champions.”
• The dismantling of defenses against hostile takeovers in response to shareholder pressure
and the reluctance of boards of directors to “just say no.”
• The arrival of mergers and LBOs in countries that until now have had little such activity.
• The receptivity (and strong encouragement) of institutional investors and activist hedge
funds to M&A transactions.
• Greatly expanded privatization of infrastructure.
• Dispositions, demergers and spinoffs by companies adopting (often in response to
shareholder pressure) policies to focus on core competencies.

Half of these points (national champions, privatization of infrastructure, and arrival of LBOs in new lands) have an explicit non-US component. And the rest potentially come into play in cases of cross-border activist pressures, restructuring, etc.

Then there’s the sovereign wealth funds (SWFs):

The wild card in 2008 will be the M&A activity of companies in the commodity-rich countries and China and India and the investment activity of their sovereign wealth funds. During 2007 the SWFs made major investments in private equity funds and their management companies and in financial companies seeking additional capital. The activities of SWFs in 2008 could be a major factor in overall global M&A activity.

Lipton doesn’t come right out and say it, but basically M&A law has become a borderless game.