The global M&A market has gone on a recess to wait out until the Covid-19 pandemic passes. According to Kagan, a media research group arm of S&P Global Market Intelligence, the U.S. M&A volume reached a total of $90.9mn in the second quarter of 2020 . This constitutes the sector’s lowest quarterly deal volume in Kagan’s records, tracing back to 1983. Further, only four transactions exceeded $1mn in the 2nd quarter, which reflects the stagnation of the market.
Hence, it is no surprise that the anticipated future deal volume for the remainder of 2020 is also expected to decrease. Indeed, Boeing has terminated their $4.2bn deal to acquire 80% of Embracer’s commercial jet business . However, amidst these turbulent times, companies such as Google Cloud, Nestle SA have publically stated that they are open to acquisitions .
Evidently, each industry sector would be affected to a different extent due to this pandemic, but it does not change the fact that ‘post-pandemic M&A’ would become more difficult to achieve. As such, corporate acquirers that strategically determine to make hay during this economic crisis will be the ones that prevail as economy rebounds, which again reinforce the importance of building stronger inner M&A capabilities.
1: Intelligence, S. (2020, July 06). Q2 broadcast M&A market stalled due to COVID-19 crisis. Retrieved July 10, 2020, from https://www.prnewswire.com/news-releases/q2-broadcast-ma-market-stalled-due-to-covid-19-crisis-301088018.html
2: Valerie, I. (2020, April 27). Collapse of Boeing-Embraer deal could have major impact on C-390 Millennium’s future. Retrieved July 10, 2020, from https://www.defensenews.com/air/2020/04/27/collapse-of-boeing-embraer-deal-could-have-major-impact-on-c-390-millenniums-future/
- Henderson, M. and Bender, J. (2020, June 10). What M&A Looks Like During the Pandemic. Retrieved July 10, 2020, from https://hbr.org/2020/06/what-ma-looks-like-during-the-pandemic