What M&A Looks Like During the Pandemic
Is the coronavirus pandemic and corresponding economic downturn a time to halt acquisitions or pursue them? There are high profile examples of each. Boeing, for example, has abandoned a $4 billion deal to acquire 80% of Embraer’s commercial jet business and a 49% stake in a joint venture producing a new military cargo jet. At the same time, companies such as Google Cloud, Nestle SA, BlackRock, the British clothing company Boohoo, and others have all publicly stated that they are open to acquisitions despite the uncertainty created by coronavirus.
To understand how companies are thinking about acquisitions right now, the M&A Leadership Council queried 50 C-level executives and senior corporate development leaders about their plans. Respondents included experienced domestic and global acquirers from a representative cross-section of industries including banking and financial services, software and technology, healthcare and pharmaceutical, and professional services, among others. Respondent company sizes were distributed across representative revenue segments including 25% greater than $5 billion, 20% each from $1–5 billion and $100 million–$1 billion respectively, while the remaining 35% had revenues from $10–100 million.
We asked five key questions to assess the impact on: 1) current deals in process at the time the crisis hit, 2) anticipated 2020 deal volume, 3) top “deal-type” strategic objectives in the near future, 4) operational challenges of M&A during lockdown and shelter-in-place requirements, and 5) internal M&A capabilities.