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2021 volatility, corporate resilience, and the M&A landscape

Crafting M&A strategy in uncertain times

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.

M&A 2021: Will history repeat itself?

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.

M&A 2021: Will history repeat itself?

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:

  • Recognize the potential of acquiring strategically important assets during periods of turbulence to create high returns for shareholders;
  • Have a clear vision of the transaction that would be embraced by both the acquirer’s and target’s constituencies;
  • Understand how M&A, divestiture, JV, and alliance strategy respond to and take advantage of the secular trends shaping industries;
  • Establish a premium target list to put into play and know what your company does best; and
  • Go beyond the aggregate value of transactions to consider segment, geography, and end markets to help fortify value creation from transaction strategy.

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.

Why Deloitte?

With over 170 partners and 1,800 client service professionals in 120 countries, Deloitte is one of the largest valuation service providers in the world.

From business combinations to asset impairment to portfolio valuations, our professionals are ready to offer you multiple financial reporting valuation services. We can help you:

  • Quantify and present valuation analyses and conclusions under prevailing accounting, tax, and regulatory requirements for transaction, financing, litigation, strategic management, and compliance purposes.
  • Solve complex business and transaction issues, including analyzing alternatives and recommending insights
  • Benefit from purchase price allocation valuing legal entities for tax structuring or restructuring
  • Apply our multidisciplinary and cross-border services to meet your unique business needs while remaining compliant with domestic and global taxing authorities
  • Make business decisions with confidence, enhance your results, and get ahead of important issues

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