It’s certain that COVID-19 has caused a huge shift in the state of the United States economy. One of the pressing questions companies have to ask is whether or not M&A deals are better to carry out during this time. There are arguments to each side, both of which should be explored to determine whether M&A agreements have a place in the pandemic or not.
Those that argue that this is an inconvenient time for Mergers and Acquisitions base their statements on the market performance. A survey was conducted by the Harvard Business Review to determine the impact of the coronavirus on current M&A deals. In this survey, 51% of respondents indicated that they would put a pause in the meantime to assess the condition of the market (Bender 1). On top of this, M&A’s have been tough because of the recent Pandemic Anti-Monopoly Act, which limits the power of corporations looking to acquire.
On the other hand, some see the pandemic as a win-win situation to acquire smaller firms. Acquisition deals help companies that are suffering losses due to COVID-19. They also allow consumers to keep receiving products consistently from these failing companies (Hirsch 1).
Source: Refinitiv Perspectives Tech Information Provider
The graph above shows the numbers associated with M&A agreements in 2020. M&A, equity, and debt deals show an increase in companies conducting agreements throughout the year. Some companies don’t even see the pandemic as a restriction for their deals. From the previously mentioned survey, 23% of companies responded that they were not going to slow down or pause deals and that instead they would accelerate them in this time (Bender 1).
As a final word, the coronavirus pandemic has caused a dent in the M&A market and definitely slowed down deals for many companies. However, it’s also important to note that other companies instead see COVID-19 as a relief opportunity for small firms. As the pandemic persists and eventually concludes, we’ll see the true impact on these acquisition deals moving forward.
Bender, Mark Herndon and John. “What M&A Looks Like During the Pandemic.” Harvard Business Review, 19 June 2020, hbr.org/2020/06/what-ma-looks-
“COVID-19 Bursts M&A Activity Optimism.” Refinitiv Perspectives, 12 May 2020, www.refinitiv.com/
Hirsch, Scott. “Council Post: Strength In Numbers: This Is The Time For Mergers And Acquisitions.” Forbes, Forbes Magazine, 2 July 2020, www.forbes.com/sites/