Human Capital Considerations In M&A transactions

In any M&A transaction, there are a variety of risks that are associated with human capital. Mercer has recently released a report, People Risks in M&A Transactions (the Report), based on a survey of M&A professionals. It provides an analysis of approximately 450 M&A transactions, and interviews corporate and private equity clients, investment bankers, and M&A advisors. The Report identifies a number of human capital risks that are of concern to those in the M&A sphere.

The top five issues relating to human capital identified by participants surveyed were:

1. Employee retention: Retaining employees after a deal has taken place is crucial to the continued success of a company, and this was the greatest perceived risk in the survey. Retaining certain groups of employees can be particularly important. One Corporate Development Executive described that his "biggest risk is retention – keeping the key revenue generators, the key operators, and the