Transactions Blog

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.

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Our US colleagues published today a study on the M&A activity in the industrial products sectors. See www.pwc.com/us/industrialproducts

Despite the year-over-year decrease, some sectors began showing an increase in volume or value in the second quarter of 2009, when compared to the prior quarter. The chemicals sector experienced an increase in deal volume while the metals sector showed an increase in deal value during the second quarter of 2009. The aerospace and defense (A&D) and engineering and construction sectors were the bright spots in the second quarter, experiencing increases in both deal volume and value from the prior quarter.

”The outlook on deal activity and deal value for the rest of 2009 is following along the same path we saw in the first half of the year,” said Dean Simone, U.S. industrial products leader at PricewaterhouseCoopers. “Lack of financial investors, tight capital markets and the practically nonexistent large deal activity suggests we haven’t turned the corner just yet in the industrial products sector.”

Their conclusions are no different from what we observe from our side …

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