Mergers and Acquisitions: Financial Institutions Lever for Growth
Rising interest rates, compressed wages, and increased regulatory costs make it difficult for financial institutions to grow organically. Mergers and acquisitions (M&A) are a strategic lever for growth – M&A increases economies of scale to offset rising costs, enhances product and IT capabilities, and diversifies and expands a financial institution’s geographic and customer footprint. In fact, within banking and insurance alone, there will be approximately 600 M&A transactions by the end of 2014.
Efficiency, cost savings, and compliance remain a financial services focus throughout an M&A transaction cycle. M&A strategy and integration is as complex as ever, making it difficult to have an optimal efficiency and compliance focus on every facet. One such area is unemployment tax rate and compliance.
Just as the recent history of reductions in workforce added volatility to state unemployment insurance (SUI) tax rates, so will future increases in workforce associated with economic improvement and increased M&A activity. Moving forward, both acquiring financial institutions and selling financial institutions must be mindful of how M&A activities might impact their SUI tax rates.
To learn more about M&A best practices, download our new white paper, Mergers and Acquisitions: The Impact on Unemployment Tax Costs.
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