Greater regulation has brought the issue of pension deficits to the forefront in mergers and acquisitions, writes Hugh Thompson. But if dealt with early, it needn't be a deal breaker
When the £8.2bn cash takeover of BOC by German rival Linde was announced, the commitment on pensions was at the forefront of the deal. Linde stated that within three years BOC’s £450m pensions deficit would be paid off.
This was an important factor in ensuring that the transaction went through, not to mention a key concern for BOC’s 30,000 employees. A BOC spokesman said: ‘The pension component was a key part of the deal.’ The fact that the BOC pensions deficit issue was a headline part of the takeover says a lot about the modern mergers and acquisitions environment.
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