Category: 3. Business

Impact of overlooking people risks

When people risks are overlooked or not mitigated during an M&A transaction—either before Day 1 or in the critical months that follow—the deal almost immediately starts to lose value. Leadership teams that haven’t aligned on purpose, priorities and decision rights create confusion that cascades through the organisation. Employees receive mixed messages, collaboration stalls and legacy ways of working persist far longer than intended. This slows execution, delays synergies and erodes the energy needed to bring two companies together with confidence and momentum.

Just as damaging is the impact on culture and talent. Unaddressed cultural differences quickly turn into “us versus them” behaviours, while uncertainty drives high-performers and client-facing talent to leave. Without clarity on roles, accountability and the new operating model, productivity drops, customer relationships are disrupted and operational risks increase. Ultimately, failing to proactively manage people risks leads to value leakage, slower transformation and a combined business that struggles to realise the strategic intent of the deal.

Top 3 tips for people risk mitigation in M&A deals

Practical early action is critical to manage people risks and ensure a smooth transaction.

1. Critical role of Chief People Officer: Remember that the Chief People Officer is also the Chief Value Preservation Officer. The CPO should sit alongside the CEO and deal leads from the earliest planning phase to oversee retention strategies, organisation design and culture integration.
2. Conduct early HR and culture diagnostics: Use interviews to support HR due diligence (employment contracts, payroll, policies), culture heatmaps, skills mapping, organisational structures, RACIs and leadership assessments to identify critical roles, retention risks and cultural friction points.
3. Plan, communicate and execute: In the face of uncertainty and unknown people risks, develop scenario plans to identify key risks and mitigation strategies, e.g. for retention, redundancy and leadership blends. Open and timely communication is essential to facilitating a smooth transition and preserve institutional knowledge.

The current M&A market activity indicates that scale matters, but so does execution. Buyers and sellers must adapt: deploy disciplined pricing, embed deeper diligence, front‑load financing and make people and regulatory workstreams central to deal planning. These strategies can enhance deal resilience and help convert transactions into sustainable value — protecting returns not just at signing, but well into long‑term integration.

Learn more

Whether you’re a buyer or seller, about to enter into or considering an M&A transaction, working with the right experts can help you derisk and stay ahead of the game. If you’d like to learn more about your transactional risks or have questions about any of the above, please contact a Marsh Private Equity and M&A Services specialist.

This transaction, which mobilizes a total of EUR115 million in equity, marks a new milestone in the partnership initiated in 2019 with the investment of WCP’s leveraged buyout (LBO) WCP#3 fund in Sapian.

The continuation fund, dedicated to Sapian, will support the company’s ambitious growth strategy, particularly through future external growth operations. New investors, including Montana Capital Partners as lead investor, as well as several family offices, are joining the capital alongside existing investors. Weinberg Capital Partners also contributed to financing this transaction, which represents the sixth investment of WCP’s LBO Fund #4.

Jules Lecoeur, partner at A&O Shearman, said: “Continuation funds have become an essential tool for private equity firms and a key driver of secondary transactions. This transaction demonstrates our ability to drive single asset GP-led transactions tailored to the needs of financial investors and management teams.”

Founded in 2019 following the carve-out of the “Hygiene and Prevention” division of the ISS Group, Sapian now employs over 1,500 people across 41 branches in France and anticipates revenue exceeding EUR155m in 2025.

A&O Shearman advised Weinberg Capital Partners on all transactional aspects with a team including partner Jules Lecoeur, associates Alexia Monne, Yasmine Benhmida, Fatima Ahamada and Aresse Chegra on M&A aspects; partner Thomas Roy, senior associate Jonas Brucker, associates Baudouin Harou and Maxime Silly on financing aspects; partner Charles del Valle, senior associate Ageu Pires and associate Ryan Ceglia on tax aspects; as well as partner Olivier Picquerey and associate Marie Chauvat on employment law aspects.

Partner, Ethan Tan has been recognised for his work in aviation as a recipient of the 2026 Lexology Index Client Choice Award. Winners will be celebrated at a special awards dinner in 2026. 

The Client Choice Awards honour the world’s leading lawyers and consulting experts who excel in client care, with only 5% of ranked practitioners selected, as voted for by corporate counsel. This recognition is awarded to those who add real value to clients’ businesses above and beyond others in the market. 

Ethan’s success is a testament to his dedication and deep understanding of the aviation industry, consistently delivering practical solutions and trusted advice to his clients. 

After the surge in inflation in 2021-2023, the return to price stability and a more challenging global environment have altered the monetary picture and present the ECB with new questions. In this paper, we discuss three of them: how to define an ‘equilibrium’ monetary stance; how to deal with divergent national inflation rates; and how to navigate the forces shaping global exchange rates, in particular the euro’s. We assess the current ECB monetary stance to be broadly adequate, but we see challenges both in the persistence of cross-country inflation rate differences and in the appreciation of the euro. 

 

This paper was prepared at the request of the ECON Committee of the European Parliament. 

The Brand Group Core within the Volkswagen Group – the organizational unit including the volume brands Volkswagen, Škoda, SEAT&CUPRA and Volkswagen Commercial Vehicles – is strategically reorienting its production and establishing a high-performance regional production network.

As a first step, André Kleb, to date Head of Planning and Production Technology of the Volkswagen brand, is to assume responsibility for the regional management of production and logistics as the Chief Production Officer for the Iberian Peninsula with effect from January 1, 2026. In the spirit of overall cross-brand responsibility, this newly created function will report to Christian Vollmer, Member of the Board of Management for Production & Logistics of the Volkswagen brand and member of the extended Group Executive Board, and also to Markus Haupt, CEO SEAT&CUPRA.

The new structure for the Iberian Peninsula will include all the plants of the Volkswagen Group in Spain and Portugal. Overarching functions such as central planning, production steering, project and start-of-production management as well as logistics will be anchored within the regional management.

In connection with the reorganization, Thomas Hegel Gunther, currently Managing Director and plant manager of Volkswagen Autoeuropa, is to succeed André Kleb as new Head of Planning and Production Technology of the Volkswagen Passenger Cars brand in Wolfsburg.

Anabel Andión Lomero, to date the Head of the Pre-Series Center at SEAT&CUPRA in Spain, will become Managing Director and plant manager of Volkswagen Autoeuropa in Portugal with effect from March 1, 2026.

Summary of latest developments

In the second quarter of 2025, aggregated house prices adjusted for consumer prices declined by 0.8% yoy, slightly less compared with the 1.0% decline registered in the previous quarter.¹ Yet this marked the third consecutive year of falling property prices globally.

Diverging trends remained between AEs and EMEs, although the gap narrowed somewhat. Real house prices in AEs rose by 0.6% yoy, furthering their increase observed since 2024, despite some recent weakening compared with Q1 2025 (1.1%). In contrast, EMEs experienced a 1.9% yoy decline (versus –2.5% in Q1 2025), extending their downward trend that started in 2022 (Graph 1).

The decline in real house prices in EMEs (–1.9%) was primarily driven by Asia (–3.6%), while central and eastern Europe (3.0%) and Latin America (1.9%) recorded significant price growth. Turning to AEs, price increases occurred mainly in the euro area (3.1%) and other European countries (0.9%); in contrast, real prices fell moderately in non-European AEs (–0.8%) (Table 1).

Despite the decline observed in real house prices in global aggregated terms, jurisdiction-level data show that over 70% of AEs and 50% of EMEs experienced positive price growth (0–10%) in Q2 2025. Moreover, a small but significant proportion of economies experienced price increases above 10% (Graph 2.B). Reflecting the above, the median growth among the 57 reporting jurisdictions has remained in positive territory since the beginning of 2024 (+1.7% yoy in Q2 2025; Graph 2.A).²

Graph 3 highlights the most significant changes observed across jurisdictions in Q2 2025: real prices rose sharply yoy in North Macedonia (16%), Portugal (15%) and Bulgaria (11%), while the biggest declines were observed in Hong Kong SAR (–8%), China (–6%) and Canada (–5%).

Since the Covid-19 pandemic, global real residential property prices have increased by 3.5%. Among the G20 economies, they have risen by 112% in Türkiye and 20% in the United States and Mexico, and have decreased by 17% in China and 8% in South Africa.

From a longer-term perspective, real global prices have grown by 20.6% since the GFC, ie compared with their 2010 levels. They have more than doubled in Türkiye and risen by over 50% in India, the United States and Mexico. But they remain well below their 2010 levels in Italy (–25%), South Africa (–12%) and China (–9%) (Graph 4).

Advanced economies

In aggregate, real residential property prices in AEs rose by 0.6% yoy in Q2 2025, continuing the upward trend observed since Q2 2024.

Among this group, a significant increase was observed in Switzerland (5.0%), where real prices have risen steadily since 2024. The expansion has been more moderate in the euro area (3.1%), while developments have remained broadly flat in Japan (0.2%), the United Kingdom (–0.4%) and the United States (–0.8%). In contrast, real prices continued to fall markedly in Canada (–5.3%) (Graph 5).

In the euro area, real house prices grew by 3.1% in aggregate in Q2 2025, with some notable diversity among member jurisdictions. Portugal recorded the highest increase at 15% yoy, continuing a long-running trend, followed by Spain (10%), where prices have kept increasing for two consecutive years. Prices kept growing also in the Netherlands (6%) and Italy (2%). Germany saw the second consecutive quarter of moderate growth (1%) after an extended period of decline, and prices almost stabilised in France.

Emerging market economies

Real residential property prices in EMEs fell by 1.9% yoy in Q2 2025, reflecting a sharp decline in emerging Asia (–3.6%), with significant declines in Hong Kong SAR (–8%), China (–6%) and, to a lesser extent, Korea (–2%). Prices remained almost stable in India (1%) and Indonesia (–1%) and have risen somewhat in Thailand (3%). The Philippines recorded the highest increase in the region, at 6% (Graph 7).

Real house prices in Latin America grew by 1.9% yoy, primarily driven by Mexico, which recorded a 4% increase for five consecutive quarters, while prices in Brazil were stable.

In central and eastern Europe, prices increased by 3% yoy, with notable growth in North Macedonia (16%) and Bulgaria (11%). Prices slowed their decline in Türkiye (–2.5%).

Prices were stable in the Middle East and Africa region (–0.1%) and in particular stabilised in South Africa for the first time since 2022 (Graph 8).

Annex A: Nominal house price developments

27 November 2025

Components of the broad monetary aggregate M3

The annual growth rate of the broad monetary aggregate M3 stood at 2.8% in October 2025, unchanged from the previous month, averaging 2.9% in the three months up to October. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, increased to 5.2% in October from 5.0% in September. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) was -1.8% in October, compared with -2.1% in September. The annual growth rate of marketable instruments (M3-M2) decreased to 1.9% in October from 4.3% in September.

Data for monetary aggregates

Looking at the components’ contributions to the annual growth rate of M3, the narrower aggregate M1 contributed 3.3 percentage points (up from 3.1 percentage points in September), short-term deposits other than overnight deposits (M2-M1) contributed -0.5 percentage points (up from -0.6 percentage points) and marketable instruments (M3-M2) contributed 0.1 percentage points (down from 0.3 percentage points).

Among the holding sectors of deposits in M3, the annual growth rate of deposits placed by households decreased to 3.0% in October from 3.2% in September, while the annual growth rate of deposits placed by non-financial corporations increased to 3.5% in October from 3.1% in September. Finally, the annual growth rate of deposits placed by investment funds other than money market funds decreased to 2.1% in October from 7.1% in September.

Counterparts of the broad monetary aggregate M3

The annual growth rate of M3 in October 2025, as a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), can be broken down as follows: claims on the private sector contributed 2.8 percentage points (up from 2.6 percentage points in September), net external assets contributed 1.7 percentage points (down from 1.8 percentage points), claims on general government contributed 0.2 percentage points (as in the previous month), longer-term liabilities contributed -1.0 percentage points (as in the previous month), and the remaining counterparts of M3 contributed -0.9 percentage points (down from -0.8 percentage points).

Data for contribution of the M3 counterparts to the annual growth rate of M3

Claims on euro area residents

The annual growth rate of total claims on euro area residents increased to 2.3% in October 2025 from 2.1% in the previous month. The annual growth rate of claims on general government stood at 0.7% in October, compared with 0.6% in September, while the annual growth rate of claims on the private sector increased to 2.9% in October from 2.7% in September.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan transfers and notional cash pooling) increased to 3.0% in October from 2.8% in September. Among the borrowing sectors, the annual growth rate of adjusted loans to households increased to 2.8% in October from 2.6% in September, while the annual growth rate of adjusted loans to non-financial corporations stood at 2.9% in October, unchanged from the previous month.

Data for adjusted loans to the private sector

Notes:

• Data in this press release are adjusted for seasonal and end-of-month calendar effects, unless stated otherwise.
• “Private sector” refers to euro area non-MFIs excluding general government.
• Hyperlinks lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.