A key issue of M&A transactions is the pension obligations
of the enterprise to be sold. Sellers and acquirers are well aware
of the legal liability risk, the severity of which often cannot be
appraised with any degree of certainty due to unknown factors such
as increased life expectancy and uncertain interest developments.
In the past this uncertainty has been reflected in a tough wrangle
over an appropriate reduction of the purchase price; most recently,
greater attention has been given to the possibilities of risk
minimisation and relocation.
Adjustment prior to the transaction practically
unrealisable
It is practically impossible to revise the company pension
scheme prior to the transaction. The financial capabilities to
compensate past mistakes are frequently quite simply not available.
Additionally, works councils regularly have to be involved, which
also triggers a protracted procedure. Thus, the only option
available to the seller in the forefront of a
