M&A in the time of COVID and beyond
Legal Era|December 2020
What is clear for those engaging in cross-border M&A is that countries around the world are becoming increasingly protective of their economies and industries, with new rules being introduced and existing rules being more widely applied

M&A activity has long required those involved to consider whether the transaction gives rise to any competition or anti-trust concerns which may require approvals from relevant authorities. Cross-border transactions can also involve issues of foreign direct investment (FDI) limitations in certain jurisdictions. In the period following the millennium, barriers to cross-border transactions were generally reducing as globalization powered ahead, and cross-border trade, including M&A and joint venture transactions, became easier.

THE “GLOBAL FINANCIAL CRISIS” EFFECT

With the Global Financial Crisis in 2008, governments around the world were forced to bail out their banks.

Unlike the COVID-19 pandemic, the physical effects of the crisis were largely contained within the financial sector. For the rest of the economy, the consequences were felt mostly around the availability of credit and other forms of finance, although governments were left with huge debt piles to service.

Austerity became the buzzword when it came to budgeting. As governments sought to boost their economies, particularly through the mid-2010s, there was an increasing focus on retaining business within an economy and not outsourcing it to other, cheaper jurisdictions. This change in focus is illustrated by Donald Trump’s “Make America Great Again” slogan and Narendra Modi’s “Make in India” campaign, and the increasing tensions between China and other countries.

THE COVID-19 EFFECT

As countries were becoming increasingly protectionist through the tail end of the 2010s, COVID-19 emerged, and suddenly global supply chains were closed down. Businesses had to rapidly rethink their supply chains having been exposed to what had previously been considered a (very) minor risk.

Virtually all parts of the worldwide economy have been impacted by COVID-19 in one way or another, some positively (such as technology and communication) and others very negatively (such as hospitality and retail).

Governments around the world have extended unprecedented support to economies, severely weakening their financial strength just as the businesses on which they rely have been similarly weakened. This combination of effects has increased the concerns of governments around the world that opportunistic and exploitative acquirers will be able to acquire their domestic businesses and move them off-shore, further weakening the scope for future recovery as jobs and technologies are lost.

INCREASING PROTECTIONISM

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM LEGAL ERAView All

PROJECT DEVELOPMENT

JOINT VENTURE TRANSACTIONS

10+ mins read
Legal Era
December 2020

NEW ARBITRATION RULES

PUBLISHED BY THE LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA) AND INTERNATIONAL CHAMBER OF COMMERCE (ICC)

6 mins read
Legal Era
December 2020

M&A in the time of COVID and beyond

What is clear for those engaging in cross-border M&A is that countries around the world are becoming increasingly protective of their economies and industries, with new rules being introduced and existing rules being more widely applied

6 mins read
Legal Era
December 2020

SWITZERLAND A DIFFERENTIATED APPROACH TO FRAUD

Swiss law interprets the offense of fraud in a special way where in addition to the characteristics of deception and damage as known in many jurisdictions, a qualified lie, i.e. a malicious approach, is required

5 mins read
Legal Era
December 2020

JOINT VENTURE DISPUTES MEDIATING

Mediation has shown itself to be a powerful tool for bringing a speedy and effective end to crossborder disputes while preserving the commercial relationship between them.

7 mins read
Legal Era
December 2020

Recognition of HONG KONG INSOLVENCY PROCEEDINGS IN MAINLAND CHINA

A TEST CASE IN THE MAKING?

8 mins read
Legal Era
December 2020

CONFIDENTIALITY IN ARBITRATION: RECENT DEVELOPMENTS IN SINGAPORE

Two recent developments in Singapore case law and legislation reflect a willingness to preserve confidentiality related obligations in all arbitrations

5 mins read
Legal Era
December 2020

ESSENTIAL GOODS SERVICES UNDER IBC

WHAT DOES IT ESSENTIALLY MEAN?

6 mins read
Legal Era
December 2020

A BIDEN ADMINISTRATION'S NEW VISION FOR THE AMERICAN WORKPLACE

A LOOK AT THE KEY CHANGES PRESIDENT-ELECT BIDEN IS LIKELY TO MAKE ONCE HE TAKES OFFICE

7 mins read
Legal Era
December 2020

If You Think Positive Covid Is A Big Opportunity

Senior Vice President and Head of Legal, ESSAR CAPITAL, Badrinath Durvasula, holds forth on his professional journey, the essence of leadership, working from home, books and more…

10+ mins read
Legal Era
December 2020
RELATED STORIES

Airbnb Has A Nightmare Problem

When violent crimes happen during stays, the company’s secretive safety team is called on to soothe guests, help families—and prevent PR disasters

10+ mins read
Bloomberg Businessweek
June 21, 2021

Behind the Scenes

Get a glimpse of the inner workings of luxury hotels.

7 mins read
Global Traveler
June 2021

Celebrate Good Times

Travelers again look to special trips to observe life’s milestones.

7 mins read
Global Traveler
June 2021

Cuba Bets Big on Its Own Vaccines

If they prove effective, locally made drugs could be an economic lifeline for the island

4 mins read
Bloomberg Businessweek
May 31 - June 07, 2021 (Double Issue)

VIRUS TESTING STRATEGIES, OPINIONS VARY WIDELY IN US SCHOOLS

Children are having their noses swabbed or saliva sampled at school to test for the coronavirus in cities such as Baltimore, New York and Chicago. In other parts of the U.S., school districts are reluctant to check even students showing signs of illness for COVID-19.

4 mins read
AppleMagazine
AppleMagazine #499

COVID hold lifted, hoping for games soon

Morey playing for Bucksport

1 min read
Island Ad-Vantages
May 20, 2021

Ourlads' Giants draft analysis

A year full of firsts due to the COVID-19 pandemic made the entire process leading up to the 2021 NFL Draft both unorthodox and limited.

7 mins read
The Giant Insider
June/July 2021

A Vaccine for all Occasions

Scientists are developing a “universal vaccine” that would protect against anything the coronavirus can throw at us and maybe even the common cold.

10+ mins read
Newsweek
May 21 - 28, 2021 (Double Issue)

The Winter of Discontent

Even though america is preparing for a summer reopening, the Coronavirus will still be around to dog us when the temperatures fall.

10+ mins read
Newsweek
May 21 - 28, 2021 (Double Issue)

Grandma's Remedy

She had seen him through some difficult times. Could he help see her through the pandemic?

7 mins read
Guideposts
May 2021