13.5.3.1 Value preservation commitments

It usually takes some time before the divestment is achieved. In fact, it can even take years. In the meantime, the divestment business should remain viable. This follows from the very logic of this type of divestments; which is aimed at creating a new competitor. The divestment business should thus not be hollowed out by the beneficiary bank. Many decisions in which the divestment is specifically aimed at creating a new competitor therefore contain several divestment-related commitments to ensure that the divestment business remains viable, marketable and competitive. These commitments are sometimes referred to as ‘value preservation commitments’.

One of the commitments is the appointment of a Hold Separate Manager. The divestment business has to be managed as a distinct and saleable entity. This is why in many cases a Hold Separate Manager is appointed for the divestment business. In many decisions, it is specified that the hold separate manager can be the current CEO of the divestment business.

Another commitment concerns the employees of the divestment business. For instance, Ethias committed to encourage all key personnel1 to remain with the divestment business.2 Sometimes this commitment is not formulated as an obligation, but as a prohibition: RBS committed that it would not actively target employees working within the divestment business to transfer to RBS.

The value preservation commitment can also concern the clients of the divestment business. This commitment entails that the beneficiary bank has to refrain from actively soliciting clients of the divestment business.

A very general value preservation commitment is the commitment not to carry out any act that might have a significant adverse impact on the value, management or competitiveness of the divestment businesses. Sometimes this commitment is formulated as follows: “LBG shall carry on the Divestment Business as a going concern in the ordinary and usual course as carried on prior to the Relevant Date”.

Most decisions in which the divestment is specifically aimed at creating a new competitor contain the same value preservation commitments. Nevertheless, there are some (minor) differences. For instance, the commitment related to targeting the clients of the divestment business only appears in a few decisions. Furthermore, it should be noted that the commitments are not always formulated in the same way.3 Notwithstanding those small variations, the cases do not really differ on the value preservation commitments.