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COVID 19 impact_on_M&A landscape - Agilis advisors GMBH

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COVID 19 impact_on_M&A landscape - Agilis advisors GMBH

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  1. COVID 19 impact_on_M&A landscape - Agilis advisors GMBH All of us who had welcomed 2020 with lots of hope and spirit were caught off-guarded by the novel Corona Virus – 2019 (COVID19). While most viruses are responsible for common cold and flu, the COVID19 declared as a pandemic by the World Health Organization (WHO) has all set to disrupt both health and global wealth! The global equity indices of MSCI World, S&P 500, and STOXX Europe 600 have been wavering within short period time in a matter of weeks with a record high on February 19, 2020 to a low on March 18, 2020 and rising back again in June-2020. The impact on M&A landscape is no exception with deals values down by more than 30% compared to previous years which has brought a definite strategy switch for addressing distressed assets in the wake of COVID -19. The last quarter inscribed a whopping $2.1 trillion distress debt globally, especially in Asia with India and China leading the tally. Even though there is a drastic surge in corporate debt distress funds in the world, the fund managers; especially in distress debt is on high exigency. As in the past, M&A landscape has been time tested and endured the past economic crisis such as Lehman Brothers collapse in 2008, dot-com bubble in 2000-2002 and the Great Recession of 2009. Ironically, the anticipated global M&A volume changes in 2020 is up by +2% globally providing a positive outlook.Many of the investment firm whose diversified funds are battered by falling oil prices and economic fall-out because of the pandemic. We can't set aside the quadrupled debt of US economy without any segment discrimination. The investment in segments like financial services, oil, gas and consumable fuels, hotels, restaurants and leisure industries are wiped out during this period. So the M&A has to be structured based on the turnaround time and special situations. Since all the segments are sabotaged because of non-revenue and COVID being the common cause, M&A pose an opportunity and threat in the same platter.

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