Shareholder activists pivot to focus on CEOs and M&A
As the total number of companies publicly targeted by activist investors worldwide surpassed 1,000 for the second year running in 2024, activists moved to adapt their approach as boards continued to navigate a complex geopolitical landscape and fluctuating market conditions.
Whether it's shaping corporate strategies, pushing for better governance or operational improvements, this cohort of investors is showing no signs of slowing down with campaigns aimed at ousting CEOs in the middle of operational turnarounds and pushing M&A as a potential value-creation lever.
‘Trump effect’ expected to drive new wave of M&A demands
According to the Diligent Market Intelligence Shareholder Activism Annual Review, almost 600 U.S.-based companies faced demands in 2024,a 7% increase from 2023 and a 16% jump when compared to 2022. However, while many had predicted that the introduction of the universal proxy card (UPC) would mean a boon for activists, after two years the evidence is more nuanced with dissidents often facing an even higher bar to deliver a compelling case for board change with support from proxy advisors and large index funds considered more crucial than ever before.
Nonetheless, shareholder activism continued to function as a catalyst for change with CEO exits at U.S. companies targeted by activism almost tripling in 2024.
For 2025, however, many eyes are on M&A with expectations of lighter antitrust scrutiny and deregulation under President Donald Trump as well as favorable movements in inflation and interest rates expected to thaw activity.
Activists were “literally popping champagne” after Trump’s return to the White House was confirmed, according to Kai Liekefett, partner and co-chair, Shareholder Activism & Corporate Defense Practice at law firm Sidley Austin, who said the perception was that the Biden administration’s antitrust inclinations made it “too hard, too strict on M&A.”
New wave of activism on the horizon in Europe
After a slight softening in activity in 2024 due to economic uncertainty and geopolitical tensions, industry sources have predicted that Europe is poised for a new wave of activism in 2025 onwards as U.S-based activists turn their attention to the continent in search of new opportunities. Such green shoots were already observed in 2024 as Trian Partners set its sights on U.K. pest control group Rentokil securing a board seat while Sachem Head Capital Management’s Scott Ferguson was named to the supervisory board of German food delivery group Delivery Hero. Saba Capital Management also unleashed a campaign targeting several U.K-listed closed end funds.
Activists find new levers to push for reforms in Japan
Japan continues to be a fertile ground for shareholder activism, with 103 companies targeted in 2024, up from 66 in 2021.The number of campaigns advanced by primary- and partial-focus activists operating in the region grew from 58 in 2023 to 64 in 2024, with dissidents regularly leaning on Tokyo Stock Exchange’s recent mandate on price-to-book value to hold their targets to account.
Stay informed, stay proactive, and stay ahead of the curve with the Shareholder Activism Annual Review 2025 - your go-to source for understanding the complex and dynamic landscape of shareholder activism. By leveraging the insights from this report, boards can stay ahead of the curve and make informed decisions that drive long-term value for their investors.
We would like to extend our sincere thanks to the report sponsors, Olshan Frome Wolosky and Sidley Austin, for their invaluable support in bringing this comprehensive resource to the corporate governance community. We look forward to seeing some of you at the DMI Stewardship Series conference in New York on February 25, 2025, where we will delve deeper into these critical issues and explore what’s in store for activists and the boards they pursue in the season ahead.
