In today’s fast-paced business environment, acquisitions involving multinational companies often present complex challenges, especially when significant pension obligations are involved. This case study illustrates how our team supported a multinational firm in navigating the intricacies of defined benefit (DB) pension costs during a potential acquisition, enabling informed decision making under tight deadlines.

The challenge

A multinational organization was considering the acquisition of a business with substantial pension liabilities across multiple jurisdictions, notably the United Kingdom and Switzerland.

Considerations included:

• Limited time to assess the deal
• The need for a clear understanding of the company’s potential pension exposure, particularly the expected cash costs associated with the U.K. pension scheme

The primary concern was integrating pension risks and costs into the overall valuation of the target business while ensuring compliance with market practices and regulatory requirements.

The solution: Identifying risks

Our team advised stakeholders on the pension arrangements in both the United Kingdom and Switzerland, identifying the associated risks and outlining prevailing market practices for funding and investment.

• We developed a post-transaction strategy, ensuring that our client had a comprehensive grasp of their potential exposure.
• To facilitate decision making, we performed detailed scenario analysis of DB pension cash flows, enabling the client to factor these scenarios into their business valuation model.

This approach allowed the client to evaluate various funding strategies and their impact on the acquisition’s financial viability.

The outcome

Armed with a clear understanding of pension risks and costs, the client was able to quickly integrate our experts’ analysis into their acquisition model. This empowered them to make an informed decision about whether to proceed with the purchase, based on their preferred approach to pension funding post-acquisition. The process not only clarified the financial implications but also positioned the client to manage pension obligations strategically after the transaction.

This case demonstrates the critical role of targeted pension analysis in multinational acquisitions. By providing timely, actionable insights and scenario modeling, we helped our client navigate a complex transaction with confidence—ensuring that pension exposures were thoroughly understood and managed within the broader context of business valuation and deal strategy.