Dec 30

2025

The Indispensable Role of Chartered Accountants in Mergers & Acquisitions

Mergers and Acquisitions (M&A) are pivotal, often career-defining moments for businesses. They promise growth, strategic expansion, and increased market share. However, the process is fraught with complexity, risk, and mountains of financial data. In the United Kingdom, navigating these high-stakes deals demands more than just legal expertise, it requires the rigorous financial acumen of a Chartered Accountant (CA).

CAs are not just about dealing with accounts, rather they are the strategic financial architects and guardians of the deal. They provide the clarity and confidence needed to transform a potential opportunity into a successful transaction.

Financial due diligence

The most critical contribution a Chartered Accountant makes is during the Due Diligence (DD) phase. This is the deep dive into the target company’s financial health, where the CA acts as a forensic investigator, validating every financial claim and rooting out potential red flags.

Areas they will look into include:

Validation of Financials
CAs meticulously scrutinise historical financial statements, revenue streams, and profit margins to confirm that the reported figures are accurate and sustainable. This goes beyond the surface to verify the quality of earnings.

Identifying hidden liabilities
A primary goal is to uncover “skeletons in the closet,” such as off-balance-sheet financing, undisclosed contractual obligations, pending litigation, or contingent liabilities that could significantly devalue the deal post-completion.

Risk assessment
CAs will identify and quantify various financial, operational, and tax-related risks. This insight is crucial for the buyer to make an informed decision or to negotiate protective clauses (warranties and indemnities) into the sale and purchase agreement.

Valuation and deal shaping
Accurate valuation is the bedrock of any successful M&A deal. A CA’s expertise ensures that the price paid is fair and, critically, that the transaction structure is optimal for both risk and tax efficiency.

Business Valuation
CAs employ sophisticated financial modelling techniques, such as Discounted Cash Flow (DCF) analysis and comparable company analysis, to determine a robust and justifiable valuation.

Tax-efficient structuring
The choice between a Share Purchase and an Asset Purchase is the most consequential decision in the UK M&A landscape. A CA’s advice here directly impacts millions in potential tax savings or unforeseen costs.

A Share Purchase is generally preferred by sellers in the UK because it subjects them to the lower Capital Gains Tax (CGT), often qualifying for the 14% rate via Business Asset Disposal Relief (BADR). However, it’s high-risk for the buyer, who inherits all historic liabilities of the company. Conversely, an Asset Purchase is low-risk for the buyer as they only acquire specific assets and avoid hidden liabilities, but it is less attractive for the seller due to the dreaded “Double Tax” charge on the sale proceeds.

Post-deal integration
A successfully closed deal is only half the battle. A Chartered Accountant is vital in the final, complex stage of integrating the two businesses to realise their strategic goals.

A CA will oversee the mammoth task of merging and standardising disparate accounting policies, financial reporting systems, and internal controls to create a unified financial infrastructure.

Purchase Price Allocation (PPA)
Under UK and international accounting standards, CAs perform the PPA, which legally allocates the purchase price to the acquired assets and liabilities. This crucial step impacts future depreciation, amortisation, and the calculation of goodwill on the balance sheet.

Regulatory & compliance
Post-merger, CAs ensure the newly combined entity remains fully compliant with UK accounting standards (e.g., FRS 102) and regulatory requirements, mitigating the risk of future financial or legal penalties.

In the intricate, high-value world of UK Mergers and Acquisitions, the Chartered Accountant is the essential professional. Their technical expertise, strategic foresight, and unwavering commitment to financial truth provide the foundation for an efficient, legally sound, and financially successful transaction. They are the trusted advisor that turns corporate ambition into reality.

The power of a dedicated M&A engagement team

To successfully navigate the complex world of M&A, a Chartered Accountant doesn’t work in isolation. A key advantage of engaging a dedicated corporate finance firm is the formation of a cross-office engagement team. This approach ensures we harness our specialised knowledge and coverage of the UK and Irish markets to meticulously assess all tax and structural consequences. By strategically handpicking our M&A team members from all our offices, we guarantee the assignment benefits from the deepest, most relevant expertise and experience possible, covering everything from detailed sector analysis to niche regulatory compliance.

This collective intelligence significantly reduces the risk of overlooking critical financial details or tax exposures, providing a comprehensive and robust foundation for the deal.

In the last year SCC have strongly represented our clients on deals with an aggregate value in excess of £200m. From business preparation for sale to post sale, we manage the process with a specific step plan ensuring all opportunities are availed of and risks are averted.

Our firm ensures all tax and structural consequences are thoroughly considered by harnessing our niche market knowledge across the UK and Ireland. To deliver the strongest possible specific expertise for your assignment, we strategically select Corporate Finance engagement team members from all our office locations.

To find out more about SCC’s Corporate Finance and Mergers and Acquisitions service, please contact Kathy Daly, kathy.daly@scc-ca.com.