M & A taxation: structure the transaction to preserve its value

In a merger-acquisition operation, taxation directly influences the economic balance of the transaction.

Acquisition of securities or assets, financing, debt recovery, cash flow, prior reorganization or future integration of the target: each choice may change the overall tax cost of the transaction and the value actually retained by the recipient or transferor.

The structure of the operation can significantly vary its cost

Two schemes with comparable economic results can lead to very different tax consequences.

The analysis should therefore cover the whole transaction architecture: acquisition vehicle, flow processing, deductibility of financing, taxation of capital gains, distribution regime and post-operation restructuring prospects.

Taxation is becoming a real bargaining and valuation parameter here.

Integrate tax strategy from the design of the deal

A successful transaction is not only judged at its acquisition price. It must also be assessed in terms of its tax cost, its ability to generate flows and how the chosen structure will preserve the value created over time.

The firm intervenes on this strategic dimension in order to compare the possible architectures, to identify the levers of optimisation and to seek the structuring allowing the operation to be carried out with the greatest possible tax efficiency in accordance with the law.

Master Édouard Pruvost specializes in tax strategy advice applied to mergers and acquisitions. To analyse the taxation of an acquisition, sale or reorganization and identify choices that could improve the net worth of the transaction, contact the firm.