COVID-19 has an effect and at an impact on almost every part of the world. Pandemic or the outbreak is also affecting the merger and acquisition activities throughout the world. There is a solid dearth of big deals, both within the countries and with other countries. Almost all the countries across the world are battling hard to run their regular operations and to stable the economy. Therefore, there is very less focus on mergers and acquisitions at the moment. The corona outbreak has affected millions of lives directly and billions or trillions indirectly. The merger activities have slowed down like anything, almost 33% or more.
Also, the number of deals has fallen down immensely too. The series impact of coronavirus on mergers and acquisitions could be assessed via the M&A activity in Microsoft Dynamics 365 solutions. This is what we will talk about in the article.
Where is the economy heading? What’s the state of M&A?
Economy is facing a terrible time at the moment, and we are not talking about just 1 or 2 countries in the world, but we are talking about the entire world. Almost every company in every company is scared of a tough situation. The business is totally down, and therefore, lives of billions of people are affected.
In fact, a lot of people are losing their jobs and many more and facing possible similar situations. Whereas, businesses, bot small scale and big scale are facing probably the toughest situation of all times, without any answers. Some of the businesses are trying to operate as per their continuation plans. But, a lot of them don’t have any buyers in the market, so for them, business continuation is not even a possibility!
State of mergers and acquisitions
Needless of say, the state of mergers and acquisition in the current world scenario is not worth talking about at all. In just a few months-time, businesses have faced terrible situations, many of them have even shut down their operations, as they were forced to do so because of losses. A large number of companies have either reduced their staffing or operations. Customer spending is at an all-time low almost, and there are several industries that have been hit very badly. In fact, even the demand and supply of oil and gas have been affected, therefore chances of mergers and acquisitions are almost nil.
COVID-19 has not only affected the financial system, however, it has even impacted the valuation of sellers. At the same time the buying capability of the people is very low. Therefore, the M&A deals are severally affected by all this. In fact, the deal terms or the conditions might have been changed or affected due to all this. Therefore, there is no doubt about the fact that mergers and acquisitions are not only absolutely slow but near to impossible.
How does the future look like?
First of all, the entire world needs an answer to when will we have actually have a future free of corona. And, then only most of the future plans could be made. But, it seems like now, people have realized that they might have to live with this pandemic situation for quite some time. Therefore, business continuation plans are mostly based on the current situation.
Now, coming to the future of mergers and acquisitions. Well, there can be some hope for the people. After we are over this situation, or when we even get a little bit of a breathing scope, businesses would like to start mergers. In fact, some big players might want to look at possible profitable acquisition chances as well.
Some of the businesses care for your customer will be hit really hard, like travel and tourism, while some will still be safer, like the ones operating in the healthcare sector. So, we may see some bit of possible acquisitions or mergers in the future. Also, there is no doubt about the fact that businesses who haven’t been able to perform even a bit, they might look for some merger opportunities or collaborations.
All and all, not at the moment, but, in the near future, we might see more business transactions and collaborations happening. There have been plenty of discussions and surveys for these two, and the responders have looked to be a bit hopeful for the feature. So, just like about everything, we need to be more positive about M7A as well. Mergers and acquisitions might become prevalent as well. However, it would still depend on plenty of factors.