M&A is rarely short of grand narratives. Deals are sold on scale, growth, market access, portfolio reshaping or the appeal of putting two complementary businesses under one roof. Yet somewhere between the first boardroom slide and the first day of the combined business, the practical questions can prove just as decisive.

Cash visibility, trapped liquidity, foreign exchange risk, rating agency discussions, funding plans, banking structures and treasury technology may not carry the drama of deal strategy. But these are the practical tests that determine whether value is protected, or quietly allowed to leak away.

That was the central case made by Bank of America at a media briefing last week, where senior dealmaking and global payments executives argued that treasury needs to sit closer to the front of M&A planning. In a market where volatility is complicating transactions rather than stopping them, treasury can no longer be treated as the team that arrives late to fund the deal.

The market backdrop makes the timing important. Geoff Iles, Co-Head of EMEA Mergers & Acquisitions, Bank of America, says activity has proved more resilient than the geopolitical environment might suggest, with notable momentum in both global and regional volumes.

“If I go back to the end of Q1, volumes globally were up about 20%,” Iles notes. “Across the EMEA region, where I’m focused, volumes were up closer to 50%. That level of activity might seem somewhat surprising, given the geopolitical events unfolding around the world.”

The numbers point to a market that is learning to live with uncertainty. Corporate-to-corporate deals are driving much of the increase, while cross-border activity is particularly visible in the UK and within the European Union.

More telling is the way uncertainty has become part of the operating environment. Companies still need growth, even when organic expansion is harder to find. They still need to reshape portfolios, build capability and respond to competitive pressure. For many boards, waiting for calmer conditions is no longer a strategy.

As Iles puts it: “Businesses are now taking a view that uncertainty and volatility can’t put an automatic brake on M&A.”

That puts treasury in a different position. If volatility is no longer enough to stop deals, it has to be priced, funded, hedged and managed through the life of the transaction. Treasury’s role, then, is not simply to support an agreed deal, but to help test whether the deal can withstand the conditions in which it will actually be executed.

Beyond the financing question

Treasury’s role in M&A has often been framed around funding: how much debt, how much cash, what bridge facility, what take-out plan. While critical, these questions do not capture the full value treasury can bring to a transaction.

Early involvement can sharpen the financing plan, expose hidden risks and identify opportunities that may otherwise be missed. It turns treasury from a downstream execution function into one of the places where deal value is tested, protected and sometimes found.

“When this is done well, a huge amount of value can be driven from treasury activities,” says Matthew Davies, Head of Global Payments Solutions EMEA and Global Co-Head of Corporate Sales, GPS, Bank of America. “The reverse can also be true if early engagement from a treasury perspective is not there.”

The early questions are practical, but they quickly become strategic. Does the acquirer have visibility over the target’s cash? How much sits in jurisdictions where it cannot easily be moved? What happens to cash flow forecasts once operations are combined? Are there unfamiliar regulatory, tax or treasury practices to understand? How will the transaction affect rating agency discussions?

A manufacturer assessing a deal may naturally begin with manufacturing, logistics and supply chain synergies, then perhaps move to sales and marketing. Treasury often comes later. The risk is that its role becomes flattened into transaction financing, when the opportunity is much broader.

“If it’s debt, what is the short-term bridge financing? What’s the take-out of that financing?” says Iles. “If you’re using cash, where within the organisation is that cash coming from? Where does it reside geographically? What are the restrictions and tax implications of accessing that cash? How are you going to do the FX around it? These are all things that drive value.”

Treasury’s contribution is more than a line in the financing plan. It is an assessment of whether the combined company can move, protect, invest and forecast its cash in a way that supports the deal thesis.

From preparation to integration

Early involvement only matters if it changes what happens next. In practice, treasury readiness has to run through the full transaction cycle, from the first planning conversations to the operational grind of post-deal integration.

“We think about four different stages from a treasury perspective,” says Davies. “The first is preparation, then due diligence, then day-one readiness and finally integration, where there is a huge amount of potential value.”

Preparation is where treasury earns its seat. The function needs to be aligned with corporate finance, engaged on rating agency considerations, and already shaping the integration plan before deal momentum narrows the available options.

Due diligence is where the harder questions surface. What treasury synergies are available? Which funding sources are realistic? What transaction hedging may be needed? Where are the exposures that could alter the economics of the deal before completion?

Day-one readiness is more granular and often less forgiving. Funds need to move. Bank accounts need to be controlled. Bridge facilities may need to be in place. Risk management policies may need to be adapted before ownership changes hands. None of this is especially theatrical, but all of it matters when the combined business has to operate from day one.

Integration is where the value case is tested. Governance improves when cash, investments and banking activities are visible. Cost savings emerge through better liquidity management, more accurate forecasting and rationalised banking structures. Risk is reduced when foreign exchange, interest rate, credit and commodity exposures are identified across the new group.

“Treasury really needs to act as the in-house consultant to the various business units, helping them work through the issues that might affect them in the treasury space,” says Davies.

Many M&A problems sit between functions. A bank account structure can affect visibility into working capital. A treasury management system can shape the speed of integration. A cash pooling arrangement can influence how value is shared in a carve-out. A hedging decision can alter whether an acquisition remains attractive under different market conditions.

Treasury’s value lies in identifying those links early enough to manage them, rather than discovering them after the deal architecture has hardened.

Where value slips away

Some of the most troublesome M&A risks are not dramatic. Sometimes they are practical constraints discovered late, when they are harder and more expensive to fix.

Trapped cash is a clear example. A buyer may see a healthy cash balance, only to discover that a significant portion is held in jurisdictions with restricted or costly access. In a cross-border deal, that distinction can affect financing costs, deal structure and integration planning.

“You may have the overall cash position, but you might not be aware of how much of it is in a trapped cash jurisdiction,” says Davies.

Synergies can be another late-stage surprise. Treasury teams can bring a perspective that changes the financing mix, particularly the balance between retained cash and debt. They can also identify opportunities that would otherwise emerge too late to be fully captured.

“As an M&A banker, synergies are central, because they often justify the reason for a deal,” says Iles. “But to discover a bucket of synergies post-signing, because you didn’t realise they were there before signing, can be pretty frustrating. It can affect the shape of the deal you have agreed with the counterparty, the regulatory undertakings you have given, or the intention statements you have made in a UK public deal.”

Technology is where late discovery can become especially awkward. A transaction may involve different treasury management systems, multiple enterprise resource planning instances, fragmented bank connectivity, and inconsistent data standards. For some companies, a deal can accelerate treasury technology investment. For others, it can expose years of underinvestment.

That makes the starting point critical. If treasury systems and processes are already mature, integration can become a source of value rather than another post-deal bottleneck. If they are patchy, the benefits may take longer to materialise, leaving the combined business trying to modernise while integrating.

“There will be more value if the work has already been done,” says Davies. “But what we have seen in the past is that this can be a really good trigger moment for companies that maybe haven’t done the work around treasury management systems that they would like to do.”

Used wisely, that trigger moment can turn M&A into a catalyst for treasury redesign, rather than an exercise in making two imperfect systems live together.

Hedging moves upstream

Volatility has also shifted the point at which M&A risks need to be addressed. Foreign exchange, interest rate and credit market movements have always mattered in cross-border transactions. The timing is changing.

In a larger transaction, the period between signing and closing can be long enough for markets to move materially. Rates can shift. Currencies can swing. Share prices can alter the economics of stock consideration. Credit markets can affect refinancing assumptions. The longer the execution window, the harder it becomes to treat hedging as a late-stage technical exercise.

“We are seeing much more discussion upfront with treasury teams around how to explore hedging solutions on context of M&A deals,” says Zeeshan Waris, Managing Director, Head of EMEA Private Capital M&A, Bank of America. “That includes deal-contingent derivatives, whether around interest rates, FX or in connection with equity issuance. 

The result is that hedging becomes part of deal viability. In a calmer market, some of those exposures might have been refined after the main transaction terms were agreed. In the current environment, they can influence whether the transaction still works under different market conditions.

“People are having that conversation upfront when they are assessing the viability of the deal,” says Waris. “When you are entering significant periods of volatility, people can take a view and say: actually, this deal may not make sense if credit markets move the wrong way, or FX markets move the wrong way.”

For treasury, that changes the work. Exposure cannot be tidied up later if it has the potential to change the transaction’s economics before closing. For treasury, the task is to help the deal team understand which risks can be managed, which need to be priced, and which could challenge the original investment case.

Private capital widens the brief

Private capital is another reason treasury needs to move closer to the centre of M&A planning. The traditional choice between a sale and an initial public offering no longer captures the range of available structures. Sponsors are using continuation vehicles, minority sales and other routes to monetise assets, while corporates are exploring partnerships with private equity and private credit providers.

The expanded toolkit gives companies more flexibility, but it also pushes harder questions towards treasury. If a transaction involves bespoke capital, the distinction between debt and equity may not be straightforward. Accounting treatment, rating agency assessment, liquidity impact, and long-term capital structure all need to be considered while the transaction is still being shaped.

“There are bespoke tranches of capital available in private markets that were not there a few years ago,” says Waris. “These range from private credit solutions to private equity funds coming directly to support a transaction alongside a corporate.”

Carve-outs raise the stakes again. A corporate may retain control, share control or cede control while remaining economically involved. That can turn treasury arrangements from a post-deal operational matter into part of the transaction design.

Cash pooling is a useful example. A private equity investor may want a clean, standalone perimeter, while the corporate seller may see value in preserving certain arrangements, at least for a period. Those decisions affect liquidity, control, and each party’s ability to operate cleanly after completion.

“Even in those deals, there is definitely a case to involve treasury early in the process,” says Waris. “It helps make sure we are looking at things in a holistic way, and avoiding delays later in the process.”

Separation is never just a legal act. It is a practical exercise in disentangling cash, systems, accounts, policies and operating dependencies. The more bespoke the capital structure, the more important it is to understand how the business will operate once the transaction closes.

Building the deal habit

After completion, the deal becomes visible in the bank account structure. A large acquisition can leave the combined business with a patchwork of accounts, banks, legal entities and regional arrangements. Left alone, that fragmentation makes it harder to see cash, manage risk and enforce policy.

The companies that do this well start by building a clear picture. Treasury needs to know where accounts sit, which banks are involved, and which legal entities and jurisdictions are affected. From there, the task is to build a migration plan towards the preferred banking infrastructure, rather than allowing inherited arrangements to become the new normal by accident.

“If you don’t do that [build a migration plan], you end up with a very fragmented banking infrastructure, and it becomes very difficult to get visibility and control,” says Davies.

Poor visibility can mean idle cash sits in the wrong place, exposures are missed, controls weaken, and funding costs rise. Done properly, that work helps the new organisation behave like one company, rather than two businesses connected by a transaction document.

Process is only part of the answer. Repeat acquirers often become more disciplined because they develop a framework for who needs to be involved and when. Treasury becomes part of the core deal team because its experience helps highlight where value is created and where problems may emerge.

“I suspect there is a correlation between a client’s propensity to do M&A and its sophistication around the process,” says Iles. “Clients that do M&A on a regular basis quite quickly develop a framework for these deals and recognise the importance of the key stakeholders, including treasury.”

That framework is a sign of dealmaking maturity and gives the organisation a common view of the assumptions, stakeholders and decision points that need to be revisited as a transaction evolves.

“In a volatile environment, where the goalposts are moving every day, there is an efficiency gain from having treasury involved early,” says Waris.

The strongest argument for treasury’s role in M&A is the deal itself. Strategy may explain why two companies should come together, but cash, risk, systems and control determine how well they do so. In a market where uncertainty is built into the deal environment, treasury should be at the table early to shape the outcome.