The Impact Of COVID-19 On M&A

The COVID-19 pandemic is expected to impact the process, timeline and documentation of M&A transactions in the turbulent times ahead of us. Below are some techniques for parties to protect themselves in the current crisis.

Impact on ongoing negotiations

Apart from the instinctive reaction to pause and reflect over the new developments, parties in the midst of negotiations will likely rethink some of the fundamental aspects of the deal, such as:

Valuation: Are the historical results of the target still a good benchmark for pricing and will the projections still hold the test of time? Can the expected post-closing synergies still be achieved?

Binding offer: How binding is an already signed binding offer and can one party discuss the terms or even walk away from the deal?