What does the current political and economic situation mean for M&A?

Was the Russian invasion into the Ukraine really a “black swan“, as so many claim? For political observers of Russia and Eastern Europe, Putin‘s move was not a complete surprise. However, the move was not expected by the broader investment and business community. Surprises, uncertainty, and instability are poison for capital markets as well as for M&A. Buyers as well as sellers prefer to have visibility on how the economy will develop, and combined with rising interest rates and supply chain interruptions, the situation created a very instable market for M&A.

However, there is still a lot of cash available to make acqusitions. We would argue, that is exactly moments of uncertainty and hesitation which create interesting opportunities for buyers with a medium to longer term vision with a prudent approach towards leveraging (both of which „good“ buyers should have, anyway!)

So the answer in 2022 should perhaps be one of finding the right transactions rather than an approach of wait and see. While acquisitions come with inherent risks, and it is always a challenge to get the timing 100% right, strategic acquisitions should provide the basis for the acceleration of future medium to long term growth.

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