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The Implications of Global M&A for Corporate Treasury Teams

The Implications of Global M&A for Corporate Treasury Teams

by HSBC


Despite a slight slowdown in 2015 versus 2014, M&A activity in the natural resources and utilities sector is still running at exceptional levels. Looking ahead, there is expectation in the industry that these activity levels will continue to increase over the next few years. This inevitably raises considerable challenges in terms of post-M&A corporate treasury reorganisation, for both acquirers and disposers of assets. HSBC examines these challenges and how best they can be addressed.

Consequences

While M&A presents opportunity, it also begets substantial workload for corporate treasury. Potentially hundreds of bank accounts have to be opened and closed, data from differing ERP and treasury systems have to be consolidated/normalised, numerous authorised signatories have to be changed, liquidity structures need to be revised: these are just some of the adjustments that are required post M&A.

The long history of M&A activity in the Natural Resources and Utilities sector means that most participants are well aware of this workload. Nevertheless, while they may plan and budget accordingly, it is still a painful challenge that must be overcome - especially if there has been an accumulation of legacy systems from earlier M&A activity.