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choosing a merger partnerMany associations are currently in the process of deciding whether or not to seek to merge with another association or associations to form a stronger Group. This is a key decision for the association, not to be taken lightly, and involving many considerations such as whether: . the new group would be significantly stronger financially than each of its parts, and in particular stronger than your own association currently is We are very well equipped to advise associations about these issues, and assisting in the process of merger investigation is becoming a significant part of our work portfolio. Our methodology for choosing a merger partner is rooted in our knowledge of quantified grading systems for banks funding the sector, and is further informed by our recent experience of designing risk-based regulation for the Housing Corporation. Combining these methodologies enables us to estimate the probability that a given housing association will get into financial or regulatory trouble. An example of the application of our methodology for choosing a merger partner is described here. Disguising the identity of the organisations involved, we ask the question: is A the best possible merger partner of B? |
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© Hargreaves Risk and Strategy 2004 |
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