7 Ways the Pandemic Will Shape M&A in the Second Half of 2020

Spencer Klein, co-chair of Morrison & Foerster’s global M&A group and head of the corporate department in New York, spoke to Law360 about the issues M&A attorneys will have to face in the second half of 2020 after the coronavirus created an extreme slowdown in activity.

“There are buying opportunities, but a lot of companies have decided that if you’re not going to get rewarded by the market for using up a significant portion of your cash stockpile right now, you’re better off sticking to your knitting, building up cash, and keeping your eyes open for the best opportunities,” Spencer said, though he added that he has confidence the M&A markets will eventually rebound. “Given the structural need for growth through acquisitions across so many industries, the strong equities markets and the availability of cash for many companies, I do expect we will see the M&A market rebound strongly as the overall economy continues to recover.”

Law360 reports that activists have refrained from pushing for companies to make major changes or seek to sell; however, Spencer doesn’t think they’ll remain on the sidelines forever. “I think it was almost viewed as unsavory to try to distract companies from figuring out how to keep employees safe and keep their businesses afloat,” he said, noting that as the year goes on, he expects to see an uptick in hostile takeover attempts. “It just stands to reason that as we emerge from this crisis, there are going to be companies that have the ability to do things and companies that are weakened.”

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