When one business buys another, the staff in the business being bought are treated within the scope of legislation called the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE).
TUPE requires that employers acquiring businesses do the following to protect the staff at the time of transfer:

The one exception to contractual entitlements currently is the requirement to transfer occupational pension entitlements. Neither is there any legal requirement on the new employer to provide replacement pension provision. In some cases, occupational pension schemes provide far more than an income following retirement. They also venture into provision for ill health retirement, for survivors’ benefits and for lump sum payments in the event of death in service. So, under TUPE, employees are not legally entitled to benefits such as these being continued with a new employer, following a TUPE transfer.
However, on 15th March 2005, the government passed regulations enhancing pension protection under TUPE, which took effect on 6th April 2005. (The Pensions Act 2004 and the Transfer of Employment (Pension Protection) Regulations 2005). It also issued another public consultation document on revising the rest of TUPE. This new legislation seeks to protect staff who have previously enjoyed occupational pension arrangements prior to a TUPE transfer. For such staff, certain pension provisions must now be made by the new employer once staff have transferred to their employment. This could affect the cost of business acquisitions in the future and is worth considering in relation to the effect on long term business costs and the working life of staff being transferred, before a business is acquired.
The following staff would qualify for this new pension provision under TUPE:

A member of staff will NOT qualify for protection under the Regulations unless the employer transferring the business already made, or was required to make, contributions for him. The new Regulations require that transferring staff have a contractual entitlement to become a member of the new employer’s occupational pension scheme. Alternatively, they must be able to make relevant contributions towards a stakeholder pension scheme of which the new employer is a member.
The new employer may wish to reduce pension provision following a transfer (rather than at the time of transfer) but is still obliged to match the employee’s contribution to a stakeholder scheme up to a maximum of 6% of salary. For the purposes of calculation, salary would be defined as the basic rate of pay and would exclude bonuses, commission or overtime etc. This requirement commences with immediate effect on the date of transfer, or the date at which the member of staff would have been eligible to join the pension scheme had they remained with the original employer. Essentially, the benefits offered in the new employer’s scheme must be at least equal to the value of benefits offered by the transferring employer at the time of transfer.
As this piece of legislation makes the pension benefit a contractual entitlement, there may be some occasions when staff transferring to a new employer are in a better position than existing staff of the same employer, who might not be entitled contractually to access the same level of benefit. This again may be worth considering at the time of acquisition. Harmonisation of terms and conditions will now have another facet which will have to be considered.
For some organisations, this legislation will not affect the decision to acquire new businesses, but for others the long term effect of pension provision may be the deciding factor in a long list of pros and cons.