Mergers and acquisitions are expected to reach a global drop of 60% in this period, according to a projection from consultancy Alvarez & Marsal and reported by Valor Econômico newspaper. Based on what happened in previous crises, in 2001 and 2008, the consultancy’s forecast represents a drop from $ 2.4 trillion in 2019 to around $ 1 trillion in 2020. In Brazil, the average drop should be 64% on the BRL 26 billion traded in 2019, impacting the size of transactions.
“We compared it with previous crises to have a magnitude of the impact on M&A. The volumes generally fall, but the interest in ‘distressed’ funds increases,” Carlos Priolli, managing partner of the consultancy told Valor. “Based on history, we see that volumes tend to return to pre-crisis levels in three to five years.”
With managers focused on saving companies’ finances, most transactions such as M&A become secondary in this moment of crisis, according to experts consulted by the media outlet.