After coming nearly to a halt amid the coronavirus—deal volumes fell 72% in April alone, compared with a month earlier, according to Refinitiv—the mergers and acquisitions market may be starting to show some early signs of life.
“Dealmaking came to a complete standstill, but now you are beginning to see activity,” says Anu Aiyengar, cohead of global mergers and acquisitions at JPMorgan Chase. “There was almost a time when you saw the mood shift. If you think things are about to resolve, you wait. But if you think things are going to be murky for a period of time, and you are a well-capitalized company, this dislocation may give you an opportunity to be strategic.”
But look closely: Experts say that deals aren’t coming back everywhere. Instead there’s an interesting dichotomy: deals at the top—and bottom—of the food chain. Dusty Philip, cohead of global M&A at Goldman Sachs, expects to see deals in the healthiest of sectors—think tech and health care—and the least viable sectors, like energy. In healthy sectors, M&A will strive for growth, while in the latter, it’s all about survival.