M&A In The Wake Of Corona
— December 3, 2020
By Feng Gu and Baruch Lev
So it’s not surprising that, as the economy is recovering, we see M&As on the rise. The third quarter of 2020 saw deals worldwide surpass $1 trillion compared with $763 billion in the prior-year period, and transactions in the U.S. reached $531 billion, up from $140 billion in the second quarter 2020 (Dealogic Ltd.). But will this pace of M&A continue? And more important, what types of deals will be executed? Moreover, will investors benefit from those M&As? Historically, M&A deals often lead to shareholder value destruction.
Prior to COVID-19 we assembled, for research purposes, the largest and most detailed M&A sample available: 36,000 deals over the 1978-2018 period. We have used this sample to predict from past post-crises deals how will M&A activity look in the near future.
Read the full Seeking Alpha article.
Baruch Lev is the Philip Bardes Professor of Accounting and Finance.