Emerging from the pandemic with even more M&A

Rather than halting M&A activity, as some feared, the pandemic has led to one of the hottest M&A markets in history and increased the importance many companies put on using M&A to fuel growth and resiliency. That growth and strategic importance is expected to further increase according to a new Harvard Business Review Analytic Services study, sponsored by Oaklins, in which 72% of the 487 mid-market company executives surveyed expect deal-making in their industry will continue to rise coming out of the pandemic. Moreover, that sentiment was reflected across North America (73%), Europe (73%) and Asia Pacific (71%), signaling an energetic global environment for M&A moving forward.

72% of mid-market executives believe M&A activity will be higher post-pandemic

As notable as this revelation are the forces behind it. Mid-market executives see M&A as a crucial means to work out challenges and opportunities in a business environment that is forever changing and accelerating, the survey suggests. For example, as the pandemic underscored the advantages larger companies enjoy in withstanding supply chain disruptions and other challenges, 59% globally (rising to 65% among North American respondents) cite growing market share as a driving force for buyers in their industry. And some 70% globally have already seen, or expect to, new rounds of consolidation in their industry as a direct result of the pandemic.

70% of global executives expect to see new rounds of consolidation in their industry as a direct result of the pandemic

Similarly, the executives surveyed see M&A as a way to shore up their business strategies by acquiring technologies essential to digital transformation, as well as to rethink their supply chains, expand globally and increase sales, earnings and other metrics. In search of promising acquisitions, companies are looking outside their industries.  

These and other findings point to a dynamic M&A environment in the years to come, as businesses seek to maintain their competitive edge long after the pandemic moves into the history books.

 

For a closer look at key trends driving mergers and acquisitions in today’s fast-changing environment, read the full report by Harvard Business Review Analytic Services, “A New Vision for How Organizations Can Use M&A to Adapt to a Post-Pandemic Economy”. And reach out to Oaklins to discuss how these trends could affect your own business.

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