The Treasurer July - August 2014

Editor's Letter

Anyone who has lived through a merger or an acquisition will know that the reality is often not all that it’s cracked up to be on the corporate press release. This is not only the case if you find yourself in the unfortunate position of being a ‘synergy’, it also applies to the treasurers who are tasked with making a success of the much fêted acquisition before the ink of the CEO’s signature has barely dried on the contract.

Mergers, acquisitions and initial public offerings (IPOs) can be accompanied by significant risks. Some of these risks are operational – locating elusive bank accounts in far-flung countries, for example, or the challenge of integrating new people and systems. Other risks are financial – overpaying being the most obvious danger – or reputational – such as the company’s share price tanking on the first day that it floats.

Amid all the excitement over M&A and IPO activity in 2014, it can be easy to lose sight of all the danger involved, however. That’s why we look in detail at the topic, on page 18.

Someone who knows a lot about M&A is Greg Block, treasurer for highly acquisitive US telecommunications giant Sprint. So we are fortunate that he shares with us his thoughts about the opportunities and challenges that come with working in such a fast-paced environment, on page 24.

This month, we take another look at the ever-present spectre of regulation. In particular, we consider how corporates will be affected by the Basel III liquidity coverage ratio that will apply to banks from January 2015 (see page 34). We also compare and contrast the regulatory reform programmes for derivatives in both the US and Europe, on page 36.

With this being summer, our thoughts naturally turn to holiday destinations. Spain is the
second most visited country in the world after France. But, in recent times, it hasn’t been the country’s sunny climate or delicious paella that has had the world talking.

Instead, the focus has been on its economic travails. Now Spain seems to be on the road to recovery at last, though, so please join us on our trip south of the Pyrénées, which starts on page 22. Just don’t forget to bring your suncream.

I hope you enjoy the summer and take advantage of what is (normally) a quiet period in the business year to find time to relax and reflect.

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