The coronavirus pandemic in the world may end in December 2020. This is evidenced by the research of scientists from the Singapore University of Technology and Design. Although no one can make accurate forecasts, statements by Singaporean scientists are encouraging especially for companies who plan to conduct an M&A deal in Asia after the pandemic situation has stabilized. An example of the previous global financial crisis suggests that companies that took risks and undertook strategic mergers and acquisitions during the recession and recovery phase generally won and exceeded those who had chosen not to take risks and remained in a comfort zone.
What is the benefit of M&A in Singapore?
Mergers and acquisitions in Singapore can be a useful tool for corporations seeking to enter the market of this jurisdiction and further expand. If you intend to start a business in Asia, then you probably conducted an analysis of how much capital can be released from the sale of assets. This capital can be directed to critical investments to realize emerging business opportunities.
Carrying out M&A in Singapore can also be a sensible step to move into related industries.
New trends in M&A
Businessmen who are interested in concluding an M&A agreement in Asia should consider the following trends:
- The quarantine measures that have been taken in many countries and the related impossibility of business travel and due diligence transactions in Singapore will be transferred to the virtual environment.
- The parties will show increasing pragmatism and flexibility in making decisions on buyer-friendly items that were previously considered controversial for sellers and caused a lot of discussions.
When concluding M&A agreements in Singapore and other Asian countries, more significant reservations about adverse changes or consequences will be taken into account, allowing buyers to cancel the transaction or provoke a decrease in value in the case of:
- increased economic risks;
- loss of funding;
- negative forecasts for the products of the object of the agreement.
Crucially, after a fairly powerful blow, the mergers and acquisitions market is gradually adapting to the current situation with COVID-19. As in any period of uncertainty, when conducting a merger in Singapore, you will encounter both risks and new opportunities that are important to recognize in time.
You are welcome to get advice on conducting M&A transactions in Singapore and get information on conducting due diligence of an Asian company by contacting IQ Decision UK.