Mergers and Acquisitions in the Years of COVID
Slowing Down Before Accelerating Yet Again
Mergers and acquisitions (M&As) have been less frequent during crises. The COVID-19 pandemic has resulted in a global economic shock and a surge in uncertainty, depressing M&A activity to record low levels. The unpromising economic prospects, the persisting high valuations, and potential liquidity crunches will restrict acquisitions for the foreseeable future. Companies with large cash balances may perform opportunistic acquisitions when asset prices drop to attractive levels. Acquisition activity can be further affected by government actions, especially if governments discourage acquisitions to promote market competition.