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Corporate transactions on hold — M&A during a pandemic

By Gabe Langerak | April 9, 2020

We discuss some of the main issues and highlight the immediate priorities and how M&A leaders are starting to think about the future.
Mergers and Acquisitions
Risque de pandémie|Mergers and Acquisitions

Our first and immediate thoughts during the COVID-19 pandemic are for the health and wellbeing of entire populations around the world. Corporate mergers and acquisitions (M&A) teams are no different with an immediate focus on their employees, their colleagues and their families. Looking beyond this, what are thoughtful companies and deal teams doing — or not doing — from an M&A perspective, and how are they readying themselves for what comes next?

In speaking with a number of HR M&A leaders from experienced multinational deal-makers, we have found some common themes. Currently, everyone is still in fire fighting mode. Organizations are focusing on the immediate elements of managing through the crisis — reacting, adapting and sustaining.

As the new normal starts to emerge and stability is restored, organizations will be better able to judge how they can operate post-crisis and what we will have learnt from this pandemic — whether that is a new way of doing things permanently, or a way to react more effectively to such “black-swan” events.

This article takes a high-level view of some of the main issues, discussions and comments that have arisen in our conversations. It highlights immediate priorities and how HR M&A leaders are starting to think about the future. This is an evolving story and will develop and change as we all get through this crisis together.


At this point in time, corporates are making sure — first and foremost — that their employees, including their deal teams, are doing well, keeping safe and healthy. This is leading to an explosion in activity ranging from health and wellness exercises, to communication and employee engagement, as well as scenario planning for the economic impact of the current situation.

Many corporate M&A teams are used to working remotely, as forming virtual teams to facilitate global transactions has long been common. For many, therefore, this aspect of the current crisis has not been as difficult as for other functions. For the HR M&A professionals and deal teams, the first business priority has been to focus on the deals that are currently live, maintaining pace and reviewing deal criteria.

As teams settle into this new way of working, we are seeing plans and objectives focusing around three core questions, which will play out at different speeds over the coming months:

  • What are the implications for the HR M&A team? The initial conversations focused on health and wellness, then moved into issues of productivity and engagement, and will gradually focus on capabilities and roles for these teams.
  • What are the implications for current and recent deals? Conversations will move from maintaining pace on current deals to reassessing deal goals and moving into a review of ongoing integration activities.
  • What are the implications for future deals? A question very few have tried to answer yet, but one many are starting to ask.

The nature of these questions, the implications of the answers for deal teams and for transactions more broadly are developing as we move forward.

Thinking through the stages of the crisis

As the global pandemic continues, and new ways of working emerge, companies will respond in their own ways and at their own pace, but in general we see activities falling into the following stages:

  1. Managing through the crisis: The initial reaction and adaptation, followed by a period of sustaining operations; how do we deal with the immediate issues and what are the necessary activities we need to be engaging in now?
  2. Restoring stability: Resetting and reimaging operations under new assumptions, protocols, focus areas, and pace, and helping bring people back to work; as some parts of the world start to return to a new resemblance of normal — how does that impact the transactions going on and the deals being done?
  3. Operating post-crisis: Resuming sustainable operations under the new post-COVID-19 business model, which may be similar to — or different from — how things used to be. How will this impact the way in which we do transactions and what does this entail?
  1. 01

    Managing through the crisis

    We’re currently seeing any number of (prospective) deals being cancelled or being put “on ice”. The deal-teams are re-valuing the targets after the economic turmoil and re-thinking the rationales for the original proposition. Whilst undoubtedly some new deals will be started, and new opportunities will arise, the short-term impact appears to have been a significant reduction in new transaction projects, and some deal teams, accustomed to working at a fast pace, are being repositioned to assist with COVID-19 teams and other areas to help the enterprise.

    Some deal teams, accustomed to working at a fast pace, are being repositioned to assist with COVID-19 teams and other areas to help the enterprise.

    In this first period, the focus is on maintaining the pace of activity on current deals, in a world where everyone is working remotely, and reassessing the viability of the current deals. This includes those that have just been announced right through to those that have just been completed. There may be any number of elements of the deal that may be changed (or need to be changed), including price variations, funding mechanisms, deal structure (e.g., full purchases turning into carve-out purchases, divestitures turning into joint ventures), time to closing, practicality of employee consultation and legislative approvals, verification of employment and actively at work, performing employee compliance checks, getting equipment to brought-on employees, retention package agreements or budgets, go/no-go criteria, etc.

    There is a large focus on the valuation and deal plans and objectives with regard to implementation and synergies. Restructuring plans may need to be reassessed given the current environment and retention polices redesigned for example.

  2. 02

    Restoring stability

    At the moment, cash is king and will remain so for a while. While the pandemic has a significant impact on wellbeing and people’s mental, emotional, social and financial health; the global financial turmoil it has unleashed means that companies are being prudent with cash reserves and may also find it harder to raise financing for future deals. Several serial acquirers that we spoke to raised the expectation that we could see an increasing number of deals established as partnerships between strategic and financial investors as confidence starts to return.

    This period will likely see some opportunistic acquisitions by organizations that have managed to weather the crisis relatively intact and possibly some necessary divestitures from companies that didn’t. A clear guideline from the 2008 financial crisis is to beware cheap buys: If it looks too good to be true, it usually is! While no-one wants to be portrayed as taking advantage of the current health crisis, deal teams will be dusting off their playbooks to be ready to move at pace for interesting opportunities that will arise.

    A clear guideline from the 2008 financial crisis is to beware cheap buys… if it looks too good to be true, it usually is!

    As some countries start to open up again, and travel is restored, we may find that certain regions and industries will bounce back more quickly than others and opportunities start to surface quickly. Acquirers that are better able to work remotely, have global capabilities and scalable methodologies, and digital tools to allow them (for example) to assess management culture and leadership capabilities from a distance without relying on flying deal teams around the world may find themselves well positioned.

  3. 03

    Operating post-crisis

    So, where will we be once this health and economic crisis has passed? Our conversations are already indicating that many expect corporates may revisit the nature of their portfolios and will take the opportunity from future transactions to reshape their business models. Phrases such as “a reassessment of supply chains” and “right-shoring key functions” come up repeatedly.

    In general, however, this is speculation at this point. The most common answer when we ask, “What will change?” is silence. The best HR M&A leaders are focused on steadying their teams, delivering on current deals and staying close to corporate strategy teams so that they are ready to play their part in future deals.

    However, some consistent themes are already becoming clear - for instance, the increased value on effective communication to employees, the value of metrics and data analytics in M&A over “gut-feel” — particularly when deal teams are not face-to-face — and the premium on quality leadership that employees can rally behind and trust.

    Finally, several corporates are already asking whether employees will still be happy to go back into the office? Will working from home be a new normal — and what does that mean going forward?


As yet, there are no clear answers on what the future holds. HR M&A teams are navigating the current situation as best they can, focusing on their people first and starting to think about the future. As each country and each business moves through the stages of the crisis, we will learn more, and we will share what we hear and where we see best practices developing.


Senior Director, Western Europe Leader for M&A Consulting at WTW

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