M&A deals: Significant changes to the way costs are managed and reported
New IFRS, IAS and FASB standards change accounting rules.
There has been an important change in the M&A landscape. Two new accounting standards, which came into effect on 1 July (15 December 2008 for FASB), have been introduced which will have significant implications for management of staff reduction and other integration issues. Importantly, these change the accounting rules for business combinations and are likely to affect integration decisions by acquirers in M&A deals.
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FTSE rally doesn’t translate to pension deficit reduction
Don’t be fooled into thinking the recent rally in UK equity markets is a ‘get out of jail free card’ for UK DB pension schemes. Other market factors at play mean the position on the balance sheet could actually have deteriorated, perhaps significantly, since the last company year end.
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Corporate restructuring: Easing of employer debt requirements
On 17 September, the DWP published its long-awaited proposals on amendments to the Employer Debt Regulations to ease the burden on corporate restructuring.
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M&A activity and the pension scheme trustees price for agreeing a deal
The recent announcements of potential deals involving Cadbury Schweppes, T-Mobile and Orange are welcome signs that the M&A market is returning to strength.
Prior to the recession, pension schemes were centre stage in UK deals, more so where the target had an investment grade credit rating and the deal was leveraged. While the FTSE 100 has recovered [50 per cent] from its low, significant pension deficits remain (see related story). Pensions therefore remain a key deal issue that needs addressing.
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Opportunities in distressed M&A scenarios
Continued weakness across a broad range of business sectors is resulting in an increasing number of companies restructuring debt burdens, both through negotiated agreements with major creditors and the use of formal insolvency procedures.
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No two transactions are the same and it cannot be underestimated that merger integration is a high risk event that can destroy as well as create value.
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Controlling pension cost post-acquisition
Organisations face many competing priorities immediately after an acquisition. Clearly, the primary focus is on immediate business synergies and historically often pension integration has been limited to merely closing any defined benefit plans to new entrants. However, there are real opportunities to reduce cost and risk by reviewing existing pension arrangements
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Pricing pensions in a volatile market
The current economic crisis has been marked by significant market volatility. This volatility has fed into the value placed on the pension obligations within a company's balance sheet and the price that buyers/sellers might agree for the purposes of a transaction. It is therefore more important than ever that buyers understand the risks they will be exposed to via the seller's pension obligations and the actions that they can take to mitigate these.
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Selling a business? When is the optimal time to address the pension liabilities?
Duke Street Capital's £8m payment throws open the debate about whether the clearance process should be used to address pension obligations
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US Government fires shot across the bow of pension sponsor separations
Transfer of a pension plan not connected with a significant business transfer not permissible under current US law
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Cable & Wireless deal on the cards
£1 billion bulk annuity purchase paves the way to demerger
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Asset sales, leveraged transactions, share buy-backs: the Pensions Regulator to get new powers
Consultation is underway on proposals to augment the Pensions Regulator's powers to stop sponsor's avoiding their pension obligations
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Corporate restructurings: new guidelines for managing pension liabilities
New legislation introduces ways for companies to reduce the payment required if they leave a multi employer pension scheme
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Buyer beware: selling your covenant strength to the trustees
Terra Firma makes the headlines again as the Pensions Regulator steps in to referee the dispute been the sponsor and the trustees
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Pensions Regulator confirms revised clearance guidance which has implications for M&A activity
It covers certain employer related events such as changes in the level of security given to creditors, special dividends and de-mergers where clearance by the Regulator may be considered appropriate to minimise the risk of future sanctions.
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Pension buyout market still offers M&A planning opportunities
You might expect the terms available for buying out pension liabilities to be less attractive than they were in mid 2007 because of investment market movements, but there are still real opportunities for both corporate buyers and sellers.
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Leveraged buyouts generate risks and detriment to the covenant, but there are ways for purchasers to manage these issues.
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Does your M&A target have a US pension plan? The Pension Protection Act may mean more than you think
With the weakness of the US dollar, purchasing firms with US operations may be attractive. For those targets that have US pension plans, the Pension Protection Act (PPA) of 2006 may pose some challenges that need to be understood when conducting due diligence.
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Sea Containers withdraws appeal on Regulator's demand for £90m and new guidance may empower trustees
FSD appeal is withdrawn as Pensions Regulator looks to finalise clearance consultation.
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