April 15, 2020 at 5:50 pm #109441
Paul Gray, MBAParticipant
The impact of Covid 19 in my opinion is still not fully understood, notwithstanding several commentators (official and unofficial) including the World Bank have been making pronouncements regarding the effect(s) on many economies, as it relates to reduction in their GDPs. What is certain is that the world has changed and it will not be business as usual post the Pandemic. Additionally, the knock-on effect on global businesses and global trade will most certainly result in several businesses being quarantined or put into intensive care. Governments around the world have been taking proactive policy measures in support of businesses and to prop up the vulnerable. However, depending on how long the pandemic lasts these stimulus/support packages will not be enough to maintain/sustain the businesses, let alone kick start meaningful economic activity to cause a surge in the recovery of many of the aforementioned businesses. Take the airline & cruise ship industries for example. Will these airlines and cruise companies make the turn to recovery given the heavy losses they would have sustained? Will their governments prioritize them over other industry, considering the support packages needed are astronomical in must cases? Or will they simply have to go in search of their own financing sources or white knights? If they or their Group of Companies have some capacity, why not be vultures acquire some of the spoils?April 19, 2020 at 1:44 pm #109507
Honestly, it is very difficult to predict anything at this juncture given the pandemic spread across the globe… But one thing is for sure, there is going to be a huge change in the way the economy is going to respond…April 20, 2020 at 7:12 pm #109529
I think this is going to be the catalyst that those companies that were struggling to stay afloat prior to Covid 19 are not looking for partnerships or acquirers. I am seeing some use this time as an “excuse” to file bankruptcy without judgement.April 22, 2020 at 1:01 am #109557
Looking ahead, I think the COVID-19 pandemic will definitely test the resiliency of all industries and its M&A deal volumes. Because of the significant changes in regulatory, technological demands, and the economy, this will create opportunities for more attractive price points for companies looking to buy and grow inorganically. Also with incentivizing global supply chain repatriation, it will be interesting to see how this will push acquisitions to attain direct control. I do think that after we get into a state of control post Covid, we will see an interesting wave of M&A deals emerge.
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