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Singapore: Mergers & Acquisitions strategy in the post COVID19 world

Mergers & Acquisitions

Mergers & Acquisitions in the midst of the COVID-19 pandemic may make good business sense

Mergers & Acquisitions (M&A) can be a useful tool for corporations seeking to navigate the new normal following COVID-19. Consider the example of 2008’s great recession, companies that undertook strategic M&A during the economic downturn and the recovery phase generally outperformed those that stayed the safe and stagnant path.

Divestments can free up capital to be put towards better-performing business lines or to make crucial investments to mine emerging business opportunities. The freed-up capital can be invested in digitalisation or new infrastructure or technology enhancements.

Acquisitive Mergers & Acquisitions can also be a smart move, to branch into co-related or adjacent business segments, target SMEs, “small brands” and start-ups with innovative offerings, or, reshape the ecosystem via large scale consolidation.

We have observed that executing an M&A in the midst of the on-going COVID-19 pandemic may make good business sense for some companies but may appear to be a daunting endeavour.

Source: Sandra Seah and Eef Gerard Van Emmerik | Bird & Bird