Expect a powerful rebound in dealmaking – but keep a close eye on the fundamentals
It’s not long since we published our last insights into M&A industry trends, but certain developments emerging from the dust of COVID-19 merit a return visit. In a nutshell: dealmaking has slowed in the year ‘COVID-20’, but as 2021 dawns, it looks set to rebound with a vengeance. Things will get lively, but whether you’re on the buying or selling side, you need to act with urgency but keep a close eye on the fundamentals – or risk leaving value on the table.
“COVID-19 has been an opportunity to fast-forward and see where transformation is headed. Many companies have been surprised to see the gaps in their capabilities, and will now be keen to fill them with acquisitions.”
“In addition to creating shorter-term winners and losers, COVID-19 has accentuated and accelerated more fundamental developments in the health industries. We expect innovation-led M&A to continue for large pharma companies, with private equity stepping in to create value from carve-outs and divestitures and drive consolidation in specific subsectors.”
“COVID-19 has hit traditional players in many areas of the consumer market hard, and at the same time has accelerated digitalisation, innovation and ESG-fuelled change. Add unprecedented liquidity levels to the mix and we can expect to see lively deal activity in the months to come – both transformational and distress-driven.”
“COVID-19 has accelerated the transition to zero carbon, increasingly outside Europe as well. With two basic options available – pursue legacy approaches as cost-efficiently as possible or fully embracing new net zero service offerings and business models – there’s plenty of potential for reshuffling by way of mergers and acquisitions.”
“Technology has led the stock market rebound, and with good reason: technology, media and telecoms have proven resilient in the face of COVID-19 challenges, and will continue to advance as the implementation of new technology accelerates. There’s also plenty of scope for consolidation, so expect lively dealmaking going forward.”
“With many areas of manufacturing and automotive facing an uphill struggle for revenues, players will need to consider deals as a means of taking control. We anticipate M&A opportunities as companies seek to reinvent their models to meet new customer demands and growing stakeholder expectations around ESG and non-traditional value.”