03May
The 7th and last session of this year’s M&A Academy cycle took place on 29 April looking at “HR integration after a merger”. Turbulent economic times are making many organisations undertake a transaction, whether a merger, an acquisition, a divestiture, a carve-out or a spin-off. Every transaction creates turmoil, uncertainty and opportunities for people.
Peter De Bley, Partner at PwC Belgium, introduced the subject before handing over to our guest speaker, Wim De Wit, HR Director, retail & private banking Belgium, BNP Paribas Fortis, who presented his views on the strategic added value of HR in times of changes and the future challenges for his company.
Download the presentation: “HR integration after a merger”
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Tags: HR integration, M&A, mergers & acquisitions
26Mar
Market studies chave shown that over the last years the total accounting value of all lands and buildings of the 30.000 biggest BelCo’s amounts to EUR 50 billion. When you know that the market value of said assets equals minimum 3 times their accounting value, this represents a dramatic hidden value in the current market environment. Indeed, when companies face difficulties to access the capital market, releasing such potential should be high on their agenda. In a broad sense, this can involve OpCo-PropCo structures either internally or externally financed, straight disposals, or joint-ventures with professional real estate investors.
During the sixth session of our M&A Academy on Thursday, 25 March, we shared with you how to free up cash from real estate, by tackling the corporate tax, VAT and registration duties matters to be taken into account while splitting up real estate from operational structures. We led you through the current environment, pitfalls and opportunities of this developing market.
Download: “How can real estate become a financing means for your company today?”
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Tags: acquisition, acquisitions, financing, M&A, M&A Academy, mergers, OpCo, PropCo, real estate, Transactions
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.
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Tags: auditor, companies code, demerger, European Directive, M&A, merger, merger procedure, mergers & acquisitions, report, restructuring
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.
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Tags: acquisition, business restructuring, corporate finance, M&A, merger, mergers & acquisitions, restructuring, Tax, Transactions
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
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;
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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
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“.
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Tags: debt, distressed companies, equity swap, M&A, restructuring
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.
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Tags: acquisition, China, M&A, merger, mergers & acquisitions
14Dec
2008-2009 were 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 optimization.
Reshaping your conventional business model towards a more flexible structure can help you in for example the improvement of your business model, tax credits optimisation and/or cash optimisation.
Furthermore, the new merger law makes it possible in Europe for certain international groups to offset future tax losses and other tax attributes on a European consolidated level, leading to a lower effective tax rate, realising tax cash savings.
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Tags: acquisition, belgian tax law, M&A, Transactions
11Dec
The third session of our M&A Academy took place on 10 December looking at all the questions the arrival of the “Chapter 11 Nouveau” (at least its Belgian version) raises. Before getting the protection of the Continuity Act, however, an achievable business plan needs to be in place. Do you have one? How about the reasonability of assumptions and remedial management actions? Have you assessed the quality of future cash flows and headroom to covenants?
Our specialists, Karin Winters (Director in the Corporate & Commercial Law department) and Philippe Fimmers (Senior Manager in the Deals practice ) used their legal and financial expertise to try and answer those questions. They also highlighted the Business Continuity Act and some alternative solutions.
Download “How to anticipate/handle covenant breaches?”
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Tags: breaches, Chapter 11, continuity act, covenant, M&A, mergers & acquisitions
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