Retirement crisis now affecting mergers and acquisitions

2005

Pension black holes are putting off firms from buying or merging with one another, a report has suggested.

The study by the HR consultancy business of Towers Perrin has found almost half of FTSE350 chief financial officers felt the pension liabilities of companies they might buy or try to merge with represented major obstacles.

The survey of 70 CFOs also highlighted that their merger and acquisition ambitions were being severely affected by the issue of pension liabilities.

Towers Perrin principal Marco Boschetti said: “Focusing solely on traditional pensions accounting due diligence can materially weaken merger and acquisition success.”

But having an HR team that was up to speed in how to deal with the people side of any merger or acquisition could help the process along, he added.