M&A predictions in a post COVID-19 world: US edition

21 April 2020

Mergermarket predicts US M&A trends after COVID-19 using a combination of proprietary data and market insights to decipher market signals on future activity. Our methodology for predictions is included below.




In a best-case scenario, if the coronavirus pandemic starts to recede later this year ahead of a vaccine emerging in the next year, Mergermarket predicts US deal values and volumes will start to pick up in 12-18 months, with numbers returning to pre-COVID-19 levels in early 2022. In the worst case scenario, where a resurgent COVID-19 wave prolongs the global oil crisis and worsens trade hostilities with China, values and volumes could stay depressed despite highlights in certain sectors, until 2024. Altogether, 1Q20 deal values are down 56.3% by value to USD 207.8bn and 14.3% by volume to 1,316, as compared to 1Q19.


“It is more likely that buyers [rather than sellers] will attempt to halt or terminate ongoing deals,” said White & Case partner Michael Deyong. The US law firm has published a report indicating that despite the steep decline in M&A, deals are expected “to proceed as agreed.” Of the two largest deals announced in the US this year, Xerox Holdings called off its USD 35.5bn bid for HP, while United Technologies completed the USD 19bn spin-off of its elevator company on the NYSE.






As experts try to piece together what life after COVID-19 will look like, only one thing is clear: not all sectors will emerge equal.

“Clearly, businesses that depend on people being willing to congregate together have been and will continue to be hit badly – industries such as travel, entertainment, events, food service and gaming,” said Paul Shim, a partner at Cleary Gottlieb Steen & Hamilton.


Both Shim and Luke Laumann, a partner at White & Case, agreed niche sectors such as technology specializing in work-from-home applications, pharma, biotech, diagnostics, and personal safety would be robust for the foreseeable future. That said, Laumann cautioned, “the implications are complex and some savvy business leaders are finding ways to repurpose themselves or otherwise mitigate their downside.”


Technology, industrials, mining, business services, and financial services were among the sectors that drew in hefty deal values at north of USD 180bn apiece in 1Q19. Industrials and chemicals, at a meagre USD 53bn, was the highest performing sector in 1Q20. Technology and financial services trailed behind, while the steepest falls were seen in healthcare and business services.


[formidable id=1]
<div class="frm_forms with_frm_style frm_style_formidable-style" id="frm_form_1_container" > <form enctype="multipart/form-data" method="post" class="frm-show-form frm_pro_form frm_ajax_submit " id="form_popup-form" > <div class="frm_form_fields "> <fieldset> <legend class="frm_screen_reader">MergerMarket Subscribe Popup Form</legend> <div class="frm_fields_container"> <input type="hidden" name="frm_action" value="create" /> <input type="hidden" name="form_id" value="1" /> <input type="hidden" name="frm_hide_fields_1" id="frm_hide_fields_1" value="" /> <input type="hidden" name="form_key" value="popup-form" /> <input type="hidden" name="item_meta[0]" value="" /> <input type="hidden" id="frm_submit_entry_1" name="frm_submit_entry_1" value="a87f379266" /><input type="hidden" name="_wp_http_referer" value="/ma-predictions-post-covid-19-world-us-edition/" /><div id="frm_field_1_container" class="frm_form_field form-field frm_required_field frm_none_container frm_first frm_half"> <label for="field_qh4icy" id="field_qh4icy_label" class="frm_primary_label">First Name <span class="frm_required" aria-hidden="true">*</span> </label> <input type="text" id="field_qh4icy" name="item_meta[1]" value="" placeholder="Enter your first name" data-reqmsg="This field cannot be blank." aria-required="true" data-invmsg="Name is invalid" aria-invalid="false" /> </div> <div id="frm_field_2_container" class="frm_form_field form-field frm_required_field frm_none_container frm_half"> <label for="field_ocfup1" id="field_ocfup1_label" class="frm_primary_label">Last Name <span class="frm_required" aria-hidden="true">*</span> </label> <input type="text" id="field_ocfup1" name="item_meta[2]" value="" placeholder="Enter your last name" data-reqmsg="This field cannot be blank." aria-required="true" data-invmsg="Last is invalid" aria-invalid="false" /> </div> <div id="frm_field_3_container" class="frm_form_field form-field frm_required_field frm_none_container ion_email accepts_business_email"> <label for="field_29yf4d" id="field_29yf4d_label" class="frm_primary_label">Email <span class="frm_required" aria-hidden="true">*</span> </label> <input type="email" id="field_29yf4d" name="item_meta[3]" value="" placeholder="Enter your business email address" data-reqmsg="This field cannot be blank." aria-required="true" data-invmsg="Please enter a valid email address" aria-invalid="false" /> </div> <div id="frm_field_4_container" class="frm_form_field form-field frm_top_container ion_company frm_hidden"> <label for="field_e6lis6" id="field_e6lis6_label" class="frm_primary_label">Company <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_e6lis6" name="item_meta[4]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_6_container" class="frm_form_field form-field frm_top_container ion_country frm_hidden frm12 frm_first"> <label for="field_otmou" id="field_otmou_label" class="frm_primary_label">Country <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_otmou" name="item_meta[6]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_7_container" class="frm_form_field form-field frm_top_container ion_utm_source frm_hidden"> <label for="field_eljps" id="field_eljps_label" class="frm_primary_label">utm_source <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_eljps" name="item_meta[7]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_8_container" class="frm_form_field form-field frm_top_container ion_utm_medium frm_hidden"> <label for="field_a8lma" id="field_a8lma_label" class="frm_primary_label">utm_medium <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_a8lma" name="item_meta[8]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_9_container" class="frm_form_field form-field frm_top_container ion_utm_campaign frm_hidden"> <label for="field_ommom" id="field_ommom_label" class="frm_primary_label">utm_campaign <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_ommom" name="item_meta[9]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_10_container" class="frm_form_field form-field frm_top_container ion_utm_content frm_hidden"> <label for="field_6kbqu" id="field_6kbqu_label" class="frm_primary_label">utm_content <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_6kbqu" name="item_meta[10]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_11_container" class="frm_form_field form-field frm_top_container ion_page_title frm_hidden"> <label for="field_fpzuk" id="field_fpzuk_label" class="frm_primary_label">Page Title <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_fpzuk" name="item_meta[11]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_12_container" class="frm_form_field form-field frm_top_container ion_page_url frm_hidden"> <label for="field_aj7hq" id="field_aj7hq_label" class="frm_primary_label">Page URL <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_aj7hq" name="item_meta[12]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_13_container" class="frm_form_field form-field frm_top_container ion_zerobouncestatus frm_hidden"> <label for="field_mrpjd" id="field_mrpjd_label" class="frm_primary_label">ZeroBounceStatus <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_mrpjd" name="item_meta[13]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_14_container" class="frm_form_field form-field frm_top_container frm_hidden ion_gftracklabel"> <label for="field_dqw7i" id="field_dqw7i_label" class="frm_primary_label">GFTrackEvent <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_dqw7i" name="item_meta[14]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_15_container" class="frm_form_field form-field frm_top_container ion_ip_address frm_hidden"> <label for="field_nzvgf" id="field_nzvgf_label" class="frm_primary_label">IP Address <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_nzvgf" name="item_meta[15]" value="" data-frmval="" data-invmsg="Text is invalid" aria-invalid="false" /> </div> <div id="frm_field_16_container" class="frm_form_field form-field frm_top_container frm_hidden ion_landing_page"> <label for="field_182c0" id="field_182c0_label" class="frm_primary_label">Landing Page <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_182c0" name="item_meta[16]" value="" data-invmsg="Text is invalid" aria-invalid="false" /> </div> <input type="hidden" name="item_key" value="" /> <div class="frm_verify" aria-hidden="true"> <label for="frm_email_1"> If you are human, leave this field blank. </label> <input type="text" class="frm_verify" id="frm_email_1" name="frm_verify" value="" /> </div> <input name="frm_state" type="hidden" value="s8xfwaaizpBMz99drxmiKuSCMAW8OnK3kRg5FhimaDA=" /><div class="frm_submit"> <button class="frm_button_submit frm_final_submit" type="submit" formnovalidate="formnovalidate">Submit</button> </div></div> </fieldset> </div> </form> </div>