The Coronavirus Crisis' Effect on Mergers and Acquisitions Activity
Author(s):
Dr. Maneesh Kumar , Rahul Pal
Keywords:
Merger and Acquisition, Coronavirus, lockdown, Due diligence, Company Valuation
Abstract
The majority of economic downturns have been caused by chronic inefficiencies. Mergers and acquisitions are considered popular ways to speed up the execution of a company's inorganic growth strategy. The Coronavirus crisis is, first and foremost, a health crisis. The disease's progression is likely to be the most crucial factor in deciding the duration of the decline and, as a result, the best M&A window. But, this Coronavirus outbreak has put the global market disruption caused by the worldwide lockdown has not only forced business to reset but has also driven thousands of businesses into bankruptcy. To ensure market continuity, many would recommend restructuring. During the unprecedented Covid-19 crisis, the M&A industry saw a drop in deal value and volume, as well as delays in regulatory approvals, travel restrictions (for onsite Due Diligence), and acquisition funding delays. Deals are typically calculated based on the majority of turnover figures, which are difficult to predict in the current environment, causing target company valuations to impact negatively. M&A will enable corporations to gaze into a future filled with technology and structurally different business models as they prepare for the boom that will follow this downturn. This paper aim is challenges faced by M&A dealmakers due to the COVID-19 breakout and provide recommendations.
Article Details
Unique Paper ID: 153267

Publication Volume & Issue: Volume 8, Issue 6

Page(s): 247 - 253
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