In an interesting article, the FT explored the impact of COVID-19 on global M&A and the mixed outlook across various geographies and sectors. But what are we seeing in the domestic market?
Here in the UK, we are seeing a rise in the number of existing sales processes and early stage transactions either being withdrawn or put on hold until the impact of COVID-19 is better understood, and others are prioritising reorganisation and strategic planning to help identify and protect their core business. But there are still deals to be done.
We’re continuing to see activity in certain sectors e.g. energy, healthcare and financial services outperform others even during the current economic uncertainty. Parties are, understandably, cautious, they’re having to adapt sales processes to accommodate the new remote working world and assess the impact of various risk allocation provisions in the sale documentation in unprecedented circumstances but an underlying sense of pragmatism is shining through.
Looking forward, with valuations declining and Brexit looming on the horizon, there may be investors who see opportunities in both the domestic and overseas markets to generate long term growth and shareholder value. But that’s not to say that those opportunities won’t face their own challenges.
Written by Amy Carr.
Smaller deals and sectors less affected by the crisis are likely to rebound first. Back in 2009, pharmaceutical groups were the order of the day. This time, it might well be finance and tech.