
Treasury considerations in strategic corporate events
Is your company considering a spin off, acquisition, or merger?
Santander CIB’s Cash Management team has deep expertise in aiding Treasury teams to successfully execute these events, by providing innovative solutions and bespoke advice.
We know it’s imperative for our clients to move quickly, in order to internally prepare the business for such events.
Whether it’s undertaking early preparation ahead of time-sensitive activity, establishing the right operating model to ensure efficiency account framework critical to business, or aiding our clients to operate a parallel setup of Cash Management activities – including payables, receivables and liquidity – before the execution date, Santander CIB’s team is committed to supporting its clients to achieve their business goals.
Key considerations for a smooth Treasury transition
Santander CIB supports clients in many different ways during key corporate events, through precise planning and solution implementation.
1. Ease the segregation of Treasury systems
To ease this segregation, early project management is vital. This includes a clear understanding of the organisational structure. Achieving this clarity of structure can be done with Santander CIB’s help, via a range of bank account frameworks, new legal entities, connectivity, platforms and KYC.
To best support our clients, we take care in providing coordination and resources between the pivotal Treasury teams, IT support and ourselves.
2. Balance sheet optimisation
This is maintained or augmented through having a clear line of sight of liquidity in each geography and currency.
During these parallel operations, Santander CIB works to establish segregated, dynamic cash pool structures that can be adapted as the transaction advances. By rerouting concentration to a new header account, for example, we are optimising excess cash whilst potentially using reconciliation tools to limit obstructions to collections.
3. Deliver products and services with little disruption
In order to ensure prompt delivery of products with minimal disruption to customers, suppliers and staff, clear visibility and accurate forecasting are essential. To support clients in their transition, whether it is a spin-off from the parent company, or an M&A transaction, Santander CIB will support the maintenance of payments, collections and payroll structures that is so crucial.
4. Smooth and successful settlement of the transaction
Early identification of fund flow execution is key. By understanding how proceeds settle in the days leading up to deal, and orchestrating Treasury involvement as early as possible, is paramount for a seamless completion.
Key considerations include:
- consolidation and distribution of funds
- escrow requirements
- currency and FX
- account requirements for fiscal and ringfencing purposes
Settlement of funds can take time and cause hiccups at execution, but can be alleviated by engaging with the bank early and mapping out an execution plan for funding together. Santander CIB has considerable experience in supporting clients with strategic distributions.
5. Opportunities for enhancement
There is a consistent necessity for development through identifying potential opportunities for enhancement when it comes to upgrading technology, streamlining connectivity, and improving STP, allowing for an improved, simplified structure.
Through a geographical lens, there are also opportunities for development and further consolidation in core regions, with Santander CIB acting as a trusted partner.
Carlos Gutierrez, Global Transaction Banking - Head of Cash & Lending Sales Europe: “We are fully committed in supporting our clients’ Cash Management journey to successfully execute a spin-off, acquisition, merger. As a leading pan-European and pan-American Cash Management, liquidity and FX Bank, our expertise is there to help our clients succeed.”