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ANALYSIS
Last year was hailed as the year of the
mega-merger, with deals like Royal Dutch
Shell’s takeover of BG Group 8, and Anheuser-
Busch InBev’s tie-up with SABMiller 9 to
create a drinks giant. But the deal-making
trend has continued this year with
September’s announcement of a merger
between Bayer, the German pharmaceutical
company, and its US rival Monsanto10 adding
to a growing list of corporate activity.
One factor driving these deals is sluggish
economic growth across the world, which
means companies are finding it harder to
keep sales moving ahead; acquiring a rival’s
sales can help fill the growth gap. But there
is also an industrial impetus for some of this
year’s deals, which are changing the shape
of the chemicals industry, and agrochemicals
in particular. Professor John Colley, an expert
in mega-mergers at Warwick Business
MERGERS
MEGA TAKEOVERS DEFY SLOW ECONOMIC GROWTH
From drinks and oil giants to seed companies, merging is making business sense
School, says these deals mean the ‘Big 6’ in
the global seed market will become the ‘Big
3’ and means there could be significant
competition hurdles to overcome.
‘Rapid concentration of the industry will
give the US Department of Justice plenty to
consider with the related mergers of DuPont
and Dow Chemical, and ChemChina and
Syngenta. It is anything but clear how
customers will benefit with such a major
reduction in suppliers. Expect plenty of
demands gain competition clearance in
Europe and the US.’ There have already been
signs that US regulators are taking a more
active approach to takeover regulation, with
Allergan and Pfizer abandoning deals.
8 ,April 2015
9 , November 2015
10 , September 2016
news
THE INVESTOR | 05
Getty Images
More than a third of people over the age
of 64 have not made a will, according to
research by the Law Society5. Many may not
be aware that the failure to formally state
what will happen to their estates when they
die means their loved ones could end up
missing out on their inheritance.
Despite recent changes, the rules on
intestacy, or dying without a will, still do not
recognise the wide variety of modern family
relationships. Current rules differ depending
on whether or not children are involved. For
childless married couples and civil partners,
the surviving spouse inherits everything. If
the couple are not married, the partner is
not entitled to anything. If there are children,
the spouse gets the first £250,000 and half
of everything above that value, with the
remainder split between the children – but
only natural and adopted children qualify;
stepchildren will get nothing6.
The Law Society estimates that annual
Inheritance Tax revenues will be £8 billion
INTESTACY
WHERE THERE’S A WILL, THERE’S A WAY
Countless people die intestate, leaving behind an inheritance headache for loved ones
by 2018 7 and, while large estates will
always incur tax bills, there are legitimate
ways to reduce the cost – provided there is
a valid will and some careful planning of
how, and where, assets are distributed to
survivors following a death.
Obi Nnochiri, Senior Wealth Management
Consultant at St. James’s Place, said:
‘Recent high-profile cases have provided
a timely reminder of why having an
up-to-date will, executed by a qualified and
experienced individual, is so important.
Ideally, the individual helping you write the
will should also be able to advise on the
most appropriate ways to structure assets
so that any potential tax burden for
inheritors is reduced or eliminated.
Will writing involves the referral to a service
that is separate and distinct to those offered
by St. James’s Place.Wills are not regulated
by the Financial Conduct Authority.
5, 6, 7 , October 2014