lindiwe tsoboConsulting firm EY expects a significant increase in mergers & acquisitions in the second half of the year, following the Covid-19 pandemic which has disrupted many sectors and brought business operations to a halt.
Many believe that the effects of Covid-19 lockdown might be severe on SA's economy that is already under immense pressure, and with the recent downgrades to junk status by Moody’s Investors Service and Fitch, the road to recovery might be a tough one. EY has noted a dramatic slowdown in local M&A activity with almost all corporates, as well as private equity funds, pausing transactions until there is some clarity.
“We expect a significant increase in M&A activity and particular distressed M&A in the second half of the year driven by weak balance sheets as companies offload businesses,” he said.