M&A strategy in a post-COVID world - PwC India

By Yashasvi Sharma, Partner - Deals

Nearly 50% of CXOs think so!

As the economy gradually unlocks, almost 3 in 5 companies are expecting a tougher business environment. The COVID-19 crisis is redefining how our society and markets function. Faced with an unprecedented amount of uncertainty, corporate leaders of tomorrow recognise the need to be agile and reconfigure their products, services and supply chains. Above all, they realise the need to embrace the digital world in its full potential.

The magnitude of shift required is enormous. Not everything can be or will be achieved organically. Hence, a clear M&A strategy becomes paramount.

Not too far in the future, CXOs will have a choice – to scout for a deal that fits well with their strategic intent or consummate a transaction because the asset is available at a bargain (around 30% of acquirers are focused on bargain buys, as per our survey).

In our experience, opportunistic deals do not create value consistently. Deals underpinned by strategic rationale – driving consolidation, opening new businesses/customer segments or building new skills/capabilities – are expected to dominate M&A activity over the next 24 months. An effective M&A strategy built on strategic intent and followed by rigorous execution of the value creation plan while keeping culture and people at the core could be what distinguishes companies that create value from those that destroy it in the post COVID-19 world.