2021 volatility, corporate resilience, and the M&A landscape has been saved
Perspectives
This past year brought with it historic market lows reminiscent of the financial crisis. In order to better understand how companies can create an Mergers and Acquisitions (M&A) strategy in uncertain times, we conducted an analysis of the stock market performances of S&P 500 companies in March 2009 and 2020.
The continued impact of the COVID-19 pandemic is driving many companies to reevaluate the resilience of their strategy and asset configurations—and to explore how that might inform mergers and acquisitions (M&A) in 2021 and beyond.
As we witness tectonic shifts in government priorities, consumer behavior, and business outlooks, revisiting past experiences with volatility can help offer some perspective on corporate resilience.
Learning from the past
How can companies pursue a more resilient M&A strategy once the COVID-19 pandemic has passed?
To answer this question, our latest paper compares the short- and medium-term stock price performances of the S&P 500 leading up to the 2009 and 2020 historic market lows.
We analyze the performances of companies in the S&P 500 index through March 9, 2009, and March 23, 2020, to see how they compared with the S&P 500 in the two years (and again in the three months) leading up to these market low dates. To gain a better understanding of industry trend specifics, we segmented the S&P 500 companies into four categories: Leading, Slipping, Improving, and Lagging.
Looking to the future
We found that, in times of great turbulence, a company’s M&A strategy can be better informed with the following considerations in mind:
When revising our corporate resilience and M&A strategies––and especially in times of global market uncertainty––it’s important to learn from the successes (and challenges) of those before us. Doing so can help us address the unique issues facing today’s M&A landscape and lay a stronger foundation for value creation post–COVID-19. Download the full report to learn more.
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Tax implications and opportunities of M&A in a distressed market