Natalie Neto
Partner
Bermuda
Partners Natalie Neto, Rachel Nightingale and Senior Associate Marah Smith bring their expertise to the 2025 edition, analysing the latest trends, legal developments, and strategic considerations in M&A activity in Bermuda.
Strategic investment and steady growth in Bermuda M&A
Despite global uncertainty, M&A activity in Bermuda remained steady throughout 2024, particularly within the insurance, shipping, and fintech sectors. Looking ahead, 2025 is expected to bring increased deal flow, driven by:
- A stabilisation of interest rates across the US and Europe and improving economic sentiment.
- Private equity investment returning to life insurance and technology platforms.
- A resurgence of IPOs as confidence returns to US markets post-election.
- Continued migration of fintech and shipping businesses to Bermuda, taking advantage of favourable tax treatment and a robust regulatory framework.
As always, Bermuda’s strong linkages to the US and European markets mean global macro trends are closely mirrored in local M&A activity.
Key legal developments reshaping the M&A landscape
Appraisal litigation on the rise
A standout trend in the Bermuda market is the increase in shareholder appraisal actions under Section 106 of the Companies Act. This provision allows shareholders who did not vote in favour of a merger to seek a court-led valuation of their shares. What was once a rarely used tool has now become a strategy—particularly for arbitrage hedge funds acquiring shares specifically to challenge valuations post-merger.
The landmark Glendina Pty Limited v NKWE Platinum Ltd case was the first Section 106 matter to reach trial in Bermuda and resulted in a 33% uplift in fair value for dissenting shareholders. The Court, heavily guided by Cayman Islands jurisprudence and approach to appraisal claims, found:
- Fair value assessments must reflect what a shareholder has truly lost, balancing all reasonable valuation methodologies.
- No single party bears the burden of proving fair value; each must support its position with persuasive evidence.
- A minority discount will generally apply unless exceptional circumstances exist—here, the court applied a 3.7% discount.
Other appraisal actions are ongoing, and Jardine Strategic Holdings Ltd v Oasis Investments, scheduled to be heard by the Privy Council in 2025, is expected to address key issues such as eligibility to bring claims and abuse of process. These cases are shaping a clearer legal framework for shareholders and corporates navigating post-merger disputes.
New corporate income tax regime comes into force
On 1 January 2025, Bermuda’s Corporate Income Tax Act 2023 became effective, introducing a 15% corporate income tax for large multinational enterprise (MNE) groups in line with the OECD’s Global Pillar Two Minimum Tax Rules. In the context of mergers and acquistitions, private companies should consider:
It's applicability to MNE groups with global revenue exceeding EUR750 million.
The availability Incentives in the form of “qualified refundable tax credits” for investments in Bermuda’s education, housing, and workforce development sectors.
While revisions to the regime may follow, this marks a historic shift in Bermuda’s tax landscape, with potential implications for deal structuring, redomiciliation strategies, and long-term investment planning. It is, however, a clear signal that Bermuda remains committed to international transparency while preserving its status as a hub for global business.
Fintech and redomiciliation
Bermuda continues to strengthen its position as a premier destination for digital assets and fintech. Companies are relocating to Bermuda to obtain licences from the Bermuda Monetary Authority (BMA), and the jurisdiction’s maturing fintech regime is expected to drive M&A and venture capital exit activity in 2025 and beyond.
Our team’s full commentary on Bermuda’s M&A environment is now available on the Chambers and Partners website.
