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15Mar
Tags: chemicals, cross-border
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02Mar
Since 25 January 2010, it is possible to carry out all types of mergers without the intervention of an independent expert (i.e. the company’s statutory auditor, or an auditor/external accountant if no statutory auditor has been appointed).
Articles 695 and 708 of the Belgian Companies Code (“BCC”), modified following implementation of the European Directive 2007/63/EC, now provide that no independent expert’s report on the merger proposal is required, if all shareholders (and holders of other securities conferring the right to vote) of each of the companies involved in the merger, have so agreed.
Prior to such modification of the BCC, it was only possible to carry out a so-called “parent-subsidiary merger” without the intervention of an independent expert (i.e. a merger whereby the acquiring company already held all shares of the acquired company).
The report of the management bodies of the companies involved in the merger is however still required (articles 694 and 707). The new European Directive 2009/109/EC provides for the possibility to also abolish the requirement to draw up such report. For the time being however, this Directive has not yet been implemented in the BCC, and it is not yet clear whether the Belgian legislator will seize the opportunity to further reduce the burden of formalities for mergers.
Tags: auditor, companies code, demerger, European Directive, M&A, merger, merger procedure, mergers & acquisitions, report, restructuring
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25Feb
2008 and 2009 are challenging times for the M&A market due to the lack of available funding. Many investors and international groups are looking for cost-cutting opportunities and cash optimisation.
During the 5th session of our M&A Academy, we tried to evaluate how reshaping your conventional business model towards a more flexible structure can help you in for example the improvement of your business model or the optimisation of your tax credits and/or cash position.
Since business restructurings trigger multiple tax issues, not only transfer pricing aspects, this module also focused on the following aspects:
- the arm’s length risk allocation to restructured group entities;
- the potential ‘exit charges’ and indemnifications upon restructuring;
- the recognition, by tax authorities, of restructuring transactions.
Tags: acquisition, business restructuring, corporate finance, M&A, merger, mergers & acquisitions, restructuring, Tax, Transactions
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16Feb
The recent financial turmoil in many ways might have affected family owned businesses. Be it through the exposure to further specific industry issues/downturn due to a lack of diversification of the family wealth or be it because the available financial reserves have suffered significantly, e.g. due to operational and/or financial losses incurred or working capital surges.
In addition, the Trends Top 30.000 survey showed self-financing of companies in general at its lowest over the last 3 years (2008). While the reasons and sources thereof can be quite diverse (lower profits, more distribution or increased liabilities), self-financing might still be further hit by the effects of the economic crisis in 2009 (and …2010) and this at a moment of increased need of finance. Demand for financial resources is therefore likely to increase in the mid-term (even if funds are available within the company – cfr. Trends Top 30.000, ‘Loans to safeguard savings’ in 1 out of 4 companies).
Any given family business therefore needs to ask itself the existential question on how to continue. Whether it is its ambition to do so on a fully stand-alone basis (and whether from a financial/wealth point of view it is capable to do so), whether (temporarily) a certain level of external capital is required or whether the family wants to sell its business. Even in the first scenario, it is highly likely (and recommended) that the family diversifies its activities and hence is likely to make divestments/acquisitions. Needless to say that in the other scenarios, family businesses are likely to bring new oxygen to the M&A market in the mid-term.
Tags: family business, financing, M&A
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08Feb
The final quarter of 2009 saw encouraging signs of confidence returning across a broad spectrum of bank lending. The mild softening in pricing and the lengthening of tenors in the corporate market, a cluster of new leveraged buyouts at the end of 2009 and the re-entry of banks into the commercial property market (on a selective basis) all presage a more active banking market in 2010.
Corporate lending – There are signs of increasing confidence in the corporate lending market reflecting a slight softening of pricing, particularly on larger deals and the extension of tenors to four years in some instances. Lenders are also more willing to consider financing a new borrower where there has been a resilient track record through the recession and prospects are attractive. There are initial signs that banks are beginning to consider taking material underwriting positions; a key milestone in the return to a more normalised market.
Leveraged finance – 2009 was the quietest year for over a decade in the syndicated leveraged finance market. However, there was an uptick in activity in the fourth quarter and the pipeline for new deals is encouraging. Whilst the market is not about to accept a surge in highly leveraged, thinly priced deals, a gradual improvement in lending conditions is realistic.
Tags: banking market, deals, debt, leveraged finance
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01Feb
Today, more than ever, effective tax management is key in case you are dealing with situations such as:
- determining a bid price in an acquisition process;
- reallocation of existing bank debt and intercompany debt;
- reorganizing your current group structure;
- understanding the impact of taxes on your cash position;
- a complex supply chain with multiple countries and entities;
Tags: Business model, business plan, cash-flow, finance structuring, M&A, Post-deal, post-deal services, Pre-deal, structuring, Tax, tax assets, tax modelling, tax rate, tax structuring, working capital
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21Jan
Identifying the most important value drivers and estimating values in distressed companies is key for a successful restructuring process, especially in the case of debt for equity swaps. That’s what Michael De Roover, Partner at PwC and Philippe Rasquin, Director at PwC talked about on the fourth session of our M&A Academy.
They shared with our audience their experience in valuing distressed companies and business restructuring, highlighting the key issues and discussing some of the key steps to consider when faced with a restructuring.
Download “Safeguarding value through business restructuring“.
Tags: debt, distressed companies, equity swap, M&A, restructuring
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15Jan
On 8 January 2010, PwC has published the Q4 2009 IPO Watch Europe report. The IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK).
Europe’s IPO markets recorded a distinct upturn in activity in the fourth quarter of 2009, with both value and volume rising markedly over the previous nine months when stock exchanges continued to suffer from the worldwide loss of confidence in the capital markets and the recession. However, pricing proved difficult in what remains a buyers market.
There were 61 IPOs on European exchanges in the last quarter of 2009 with an offering value of €4,994m, compared with 44 listings that raised €1,375m in the previous quarter and the 64 IPOs with a value of €1,238m that were recorded in the final three months of 2008.
Tags: capital markets, IPO, stock exchange
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11Jan
Recently the President of the Brussels Criminal Court judged that the investigation of KB Lux was not performed on valid terms. This decision again raises questions about how to tackle economic crime and how to deal with fraudsters. In a day-to-day business environment we are more inclined to take measures internally, which in light of the KB Lux decision appears to be a more effective method. In addition, companies are often confronted with questions when dealing with a new cooperation, joint venture, merger or acquisition. These situations call for a fraud due diligence in order to avoid the inheritance of fraud risks. Due diligence investigations often prove crucial in identifying fraud risks and detecting incidences of fraud outside the books and records.
E.g. a purchaser who discovers post-deal that one of the sellers has defrauded or bribed vendors of the purchased company may be confronted with the fiscal, financial and legal consequences of such behaviour. A thorough pre-deal fraud due diligence might reveal such liabilities in many cases.
Tags: due diligence, fraud, investigation
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05Jan
The PwC China M&A press release revealed that domestic and inbound M&A deal volumes in China (including Hong Kong and Macau) in the second half of 2009 are returning to robust 2008 levels, indicating that the impact of the global economic downturn on China M&A seems to have been short lived.
More than 1,800 domestic transactions (deals being intra-China or from HK to the mainland and vice versa) are likely to be recorded in the second half of 2009, for a total of about 3,200 mergers and acquisitions for the full year, compared to nearly 3,800 in 2008. Looking to 2010, domestic deal activity is expected to grow by more than 20% compared to 2009.
A continued decline however was noted for deals made by foreign strategic buyers (focussed on sorting out problems in their home markets) and also foreign financial players finding new deals harder to come by as gaps in pricing expectations between sellers and buyers continued. There are indications though that those foreign strategic buyers will re-emerge in greater volume and deal size soon, reflecting a pent-up appetite for China targets.
Tags: acquisition, China, M&A, merger, mergers & acquisitions
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