Arguments that the impact of Brexit could feasibly be deferred until a yet-to-be-determined date when the UK government would trigger Article 50 are rapidly falling away. With the pound declining to record lows against trade-weighted averages last month, concerns are mounting around what the next few years might bring, with more than a handful of corporates already suggesting profits will be affected. Suddenly, the comfortably far-off effects of exiting the EU aren’t looking quite so comfortably far off. Currency risks have edged up the agenda, and treasurers will be revisiting hedging arrangements. Some will have more flexibility than others, but sadly, the global scene offers little in the way of respite or reassurance. In just a few days, we will learn the outcome of the US election. Forecasters have been leaning increasingly towards a Clinton win, but the populist element and the profound sense of polarisation within the electorate of this unusually bile-filled election can’t be totally disregarded. On page 18, commentator Roland Hinterkoerner picks over Donald Trump’s spending intentions and weighs up the implications of an infrastructure spending spree fuelled by Treasury bonds. Into this mix, we’re seeing the advances of some large-scale transactions. As I write, telecoms giant AT&T is in talks with Time Warner for what would amount to an $85bn tie-up, while British American Tobacco aims to buy back into the US tobacco market with a $47bn offer for Reynolds American, in which it already holds a 42% stake. The case for tobacco mergers and telecoms-content tie-ups resoundingly made, is the stage set for a wave of deals across other sectors? Consolidation may prove a decent strategy for shoring up market presence and spreading risk. In our profile this month we talk to Rando Bruns, head of group treasury at German life sciences group Merck, who knows a thing or three about acquisition funding. Merck’s purchase of Sigma-Aldrich, finalised in 2015, was a bold move, 100% debt-financed. Bruns explains the mechanics of the Sigma-Aldrich and other deals on page 20, as well as describing how he managed Merck’s relationship banks over the course of the deal, and the role that treasury can play in post-transaction integration. On page 24, Sally Percy explores the role that the ACT and treasury professionals have played on a public stage when they seek to shape and influence regulatory change, and on page 34, we look also at the opening up of Iran in a post-sanctions era. We hope you enjoy the issue.
