The 45 equity partners of Grant Thornton Ireland are poised to receive €6.5 million each following a merger of its non-audit business with the US branch, according to a report from The Sunday Times. Valued at €480 million, 60% of this deal will be cash payments awarded to these Irish equity partners. However, the 25 salaried partners of the firm, which employs 2,800 people in total, will not receive a share. The merger was announced on Thursday after New York-based private equity firm, New Mountain Capital, bought a majority stake in Grant Thornton Advisors in the States.
The audit business of Grant Thornton Ireland, employing about 1,000 people, will maintain its autonomy, operating under a different practice structure. The firm, having made around €300 million in revenue last year, ranks as the fifth largest constituent of the worldwide Grant Thornton network. The American branch is the largest, with reported annual fees summing up to $2.4 billion (€2.2 billion).
In other business news, Aer Lingus is predicted to reduce employee numbers due to the passenger limit at Dublin Airport and the company’s low profitability. According to the Sunday Independent, the company’s CEO, Lynne Embleton, informed staff about plans to keep one A333 aircraft idle and reduce the utilization of A320 planes – the firm’s most prevalent aircraft – by an equivalent of three aircraft, with potential for further modifications. Although, it was also reported that the CEO explicitly denied the possibility of a company-wide redundancy program. Compared to other airlines in the International Airlines Group that comprises British Airways, Iberia, Vueling, Level, and IAG Cargo, Aer Lingus is the least profitable.
Lastly, the government’s second-year tradition of selling a 5 per cent parcel of shares in AIB during November is expected to be deferred until the beginning of the next year due to election date uncertainty.
The government has adopted a tripartite strategy to reduce its share in the rescue bank, AIB. Over the past three years, it has embarked on consistent sale of 5% of AIB shares each June. Additionally, since 2022, it has been steadily supplying the market with stock, reducing its holding by about 1% every month. The bank has also been involved in share buy-backs. Consequently, this has led to the government’s stake decreasing from 71% to just under 21% within about three years.
Unnamed sources, as mentioned by the press, suggested that Jack Chambers, the Finance Minister, had no opportunity to decide on a block placement after AIB’s trading declaration on November 4th, particularly if an election is to take place in late November or at the start of December.
In other news, US pharmaceutical titan, Pfizer, which employs a 5000-strong workforce in Ireland, has shut down twelve Irish divisions, each with assets totalling close to €600 million. This move is a part of the company’s restructuring process, reports suggest from the Business Post. This restructure has come under the microscope as US lawmakers scrutinise Pfizer’s historic application of the “double Irish” tax strategy, a technique that was designed to minimise tax liability. This scheme was legislated against for new entrants in 2014, being discontinued for current participants by the end of 2020. The US Finance Committee wrote to Pfizer earlier this year, demanding details of their overseas operations to investigate whether the company utilised profit-shifting techniques to evade sizeable US tax payments on prescription drugs.
Moreover, The Irish Banking Culture Board (IBCB) has cautioned the Government about the growing trend of companies favouring cashless transactions. This practice of charging customers extra for services requiring cash payment is known as “cashless creep.” The Board voiced concerns in a submission on the National Payments Strategy, stating that increased reliance on digital transactions could render sections of society unable to keep up with future product/payment improvements.
The board, established by the banking industry in response to the tracker-mortgage situation, has stated that the reliance on digital-only transactions might inadvertently ostracise certain groups. Both AIB and Bank of Ireland have been the target of public disapproval due to their strategies of shutting down branches over the last ten years and transitioning some areas to cashless operations, thus exacerbating the issue.