Over the next few weeks and months, ahead of DSEi, I expect that we will witness a number of defence deals being announced. These could be fresh commercial collaborations, perhaps under the banner of AUKUS, or full-blown government-to-government contracts with the full weight of treaty obligations, technology transfers, inward investment and informal offsets. A few years ago, such activity would have been trailed in the media and through PR companies ensuring few would be surprised. Indeed, “rolling the pitch” for governments and public opinion was a lucrative activity for consultancies and government relations’ practitioners. Today, it is a little different.
At a moment when we feel the West might be in conflict with Russia and can clearly sense the great power aspirations of China, much of the courtship and due diligence of defence sector deals and transactions are being undertaken in the shadows. The challenge, of course, is how to conduct effective partnering, client and supplier reviews, privately, without each commercial participant arming themselves with myriad commercial officers, lawyers and accountants?
One way which appears growing in popularity is for each element of a transaction to offer up sovereignty to a trusted third party. This team would then undertake forensic due diligence on behalf of all sides of the deal, furnishing one report based on collective maturity assessments. These, in turn, would independently value the deal, articulate the risks and opportunities associated with it and generate a shared and agreed understanding of the forward schedule and how it was to be financed. As well as confidentiality, such an approach offers speed and professionalism – characteristics that we will increasingly value, I suspect.
Risk management professionals, especially those with a defence background, are ideally formed to undertake such an exquisite professional service. We shall see more of how such an approach has powered a number of deals to be announced this year. The case studies, where they can be identified, will point to a revolutionised risk practitioner service blending expertise and AI modelling that should be transformative. The art of the deal is the science of our learning.
