Share sales

The existence of pension arrangements can add complexity and risk to even the most straightforward of corporate transactions. The levels of risk and difficulties involved will depend on:

1. •

   the nature of the transaction (eg whether it is a share or business sale), and

2. •

   the nature of the target company's pension arrangements

What is a share sale?

Share sales involve the purchase of the issued share capital of a target company. Through this acquisition, the buyer is commercially impacted by all the contracts and deeds entered into by the target company. Acquisition of the target does not change the terms of contracts of employment the target company has agreed with its employees: the rights of both the target company and its employees continue irrespective of the target's change of ownership.

Considerations for the buyer and the seller

When it comes to dealing with pensions issues on a share sale, the key stages of a share sale can be divided up as follows:

•where the target company participates in a trust-based occupational pension scheme, the seller must, as part of its preparations to the share ...