Employee benefits due diligence enhance M&A negotiations

Bristol-Myers Squibb’s proposed acquisition of pharmaceutical company Celgene may have set the stage for biotech merger and acquisition (M&A) transactions this year. While certain aspects of M&A negotiations are secondary or tertiary aspects, they can ultimately make or break a deal.

For example, companies can encounter serious issues when acquiring a variety of unfamiliar retirement and health insurance programs. Companies typically like to delay due diligence of employee benefits to maintain the confidentiality of the impending deal and because employee benefits may be perceived as being less material to the decision about whether to proceed or not. Unfortunately, this level of discretion can be costly, as employee benefit programs can deeply affect a potential deal, sometimes to the surprise of the acquiring company.

In this article, Milliman’s William Strange offers several steps companies can implement to better manage employee benefits programs during M&A deals.

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