One of our Partners advised a client on the implications of the purchasing a company with a £¼ billion DB pension scheme.

In the course of completing the full pensions due diligence, our Partner uncovered a rule in the target scheme's trust deed which gave that scheme’s trustees extremely strong funding powers. So strong in fact, that they could demand the full buy-out cost from the Company, which totalled £200 million.

After discussions between the two parties, the client decided against acquiring the target company due, in part, to the unacceptable risk the target company’s pension scheme represented.

Had they not taken advice about the company's pension scheme at this early stage, they may have gone ahead with the transaction without knowing about the full implications of the purchase. As it was, the client was satisfied that they had made the right decision based on all of the facts.