It is an understatement to say that the COVID-19 pandemic has had a major impact on every aspect of businesses, both in America and all over the world. When it comes to mergers and acquisitions, it’s fair to say that things won’t be the same for a very long time.
The amount of businesses that have had to close is constantly being updated because we aren’t out of the woods yet. According to surveys, at least ¼ of America’s small businesses have shut down, either temporarily or for good. This means that any mergers that were already underway are most likely on hold, perhaps indefinitely. Executives and entrepreneurs are going to naturally redirect their funds towards sustaining the life of their own companies first.
Businesses have more pressing matters to attend to such as reevaluating furloughed workers and securing loans to stay afloat. Aside from groceries, pharmaceuticals, and mail-order items, consumers aren’t spending any money at brick and mortar stores. Supply chains are also cut off in many areas, which has an impact on everything. The lack of travel also means there has been a massive drop in oil and energy demand, which also has its own trickle-down effect on other businesses.
America has weathered the storm of economic crises in the past. What makes this situation different is the sudden, far-reaching impact it is having across all areas of civilized society, not just within the housing sector or on Wall Street. Deal terms will be rewritten because of this pandemic, as well as due diligence that will also have its own limitations because of ongoing needs for safety. There is no telling accurately yet how long each phase of a business deal will take once we start to inch our way into the new normal. Nothing will be happening smoothly or rapidly. It is entirely possible that old deals are now dead in the water.
Many people are now learning how to communicate remotely, perhaps for a long time to come. This changes the way previously face-to-face interactions were handled. This also adds another layer of concern about data security. There has been a surge in cybercriminal activity since quarantine began.
Some good news lies in the industries that are predicted to come back stronger than ever such as hospitality and travel arenas. There are numerous deals in place to entice travelers and potential mergers on the horizon for companies who thrive in a post-COVID world.