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What factors influence mergers during the coronavirus pandemic?

| Jul 14, 2020 | Mergers And Acquisitions |

Even in the midst of uncertain times, business continues. The current coronavirus pandemic has impacted just about every aspect of our lives. We have changed how we shop for goods, delayed services and adjusted how we work. We have transitioned our behaviors and practices to help reduce the risk of spreading the virus while doing our best to continue to move forward.

Many businesses have implemented these changes and are doing well. Transactions, like mergers and acquisitions, are still commonplace. Some factors that influence these transactions in our current marketplace include:

  • Expanding capabilities. Some businesses have realized that in order to take advantage of the changed marketplace they need to expand their businesses’ capabilities. Perhaps they need a larger reach in the tech world or a stronger communication platform. One way to achieve this goal is to merge or acquire another business that is already proficient in the target area.
  • Joining the global economy. Another factor that has triggered mergers is a push to become a part of the global marketplace. This may lead to crossing borders to join forces or acquire another company to spread your business’ reach.

It is also important to note companies with sufficient capital could set themselves up for future success by taking advantage of the reduced valuation of other businesses in the current market place. This can make now an opportune time to move forward with an acquisition — if the transaction is right for your business interests.

Business leaders can help to better ensure a wise transaction through the completion of thorough due diligence during the negotiations. This step, along with comprehensive purchase and sale agreements tailored to your specific transaction, can help to better ensure a favorable deal.