CFA Association Russia tried out a new format for its regular business breakfast, held on May 16 in the Food House restaurant on New Arbat Street. This time, the association invited five different experts, all from the Ernst & Young (EY) accounting firm, to discuss the ins and outs of M&A deals.
Mergers and Acquisitions (M&A) are transactions in which companies and other business organizations change their ownership by purchasing, selling, transferring or combining their operating units. M&As help companies to grow, merge with other enterprises to become more competitive and cost-effective, change the nature of their business or even survive.
A great deal of complex documentation and legal obligations need to be fulfilled and taken care of before and during a M&A deal. That’s what the EY experts – Victor Kalgin, Andrey Sulin, Yuri Nechuyatov, Denis Shaklein and Andrey Rechitskiy – came to talk about at the event.
Andrey Rechitskiy and Andrey Sulin kicked off a presentation telling about the key stages of M&A transactions and what kind of hidden traps one could face during a process.
Andrey Sulin (left) and Andrey Rechitskiy
“The longer time it takes to seal a deal, the higher chances of failure it has,” Rechitskiy explained. However, he also added that one shouldn’t rush either, as a hasty decision can also be detrimental for a process.
Andrey Sulin also mentioned about BEPS (Base Erosion and Profit Shifting) before introducing Yuri Nechuyatov to the audience. Yuri focused on current tendencies in taxation. In particular, he talked about the impact of BEPS in M&A transactions. Among other things, the expert pointed out that the BEPS strategy is currently being actively used in Russia
Victor Kalgin, CFA, an active member of the CFA Russia community, took the floor next and spoke about the principles of taxation. According to Victor, the three key principles of taxation are “people, business, and transparency.”
Speaking of transparency, Victor emphasized how important it is to be honest when declaring taxes. “A revenue agency will find out about everything. It will eventually know everything about all the assets that you own,” Victor said, suggesting not to try to hide anything from tax authorities.
Victor Kalgin, CFA
When carrying out M&A transactions companies face a series of complex legal questions. Denis Shaklein, the fifth speaker, extensively talked about a number of legal issues present in M&A deals.
A full video from the event is available in the members-only area of the CFA Russia’s website.
Text by Oxana Kozlova