GLOBAL - The massive size of some occupational funds will play an increasing role in future merger & acquisition deals, according to Lane Clark & Peacock (LCP) M&A head David Lane.
Lane (pictured) said pensions played a role in transactions because of the pensions regulators powers as well as the sheer size of deficits.
Lane used British Airways as an example of the increasing role of pension schemes. “You could say it’s no longer an airline, but rather a pension scheme with an airline as a side business,” he said.
“It’s almost ‘takeover-proof’ because of the pension scheme - who would want to take over those liabilities?”
Lane also highlighted the key role pension fund trustees played in an M&A, because they had to agree contributions. “Trustees are being quite optimistic at present, and those who adopt extreme positions could derail the deal,” he said.
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