M&A during a pandemic – Alterations of processes A case study on a Swedish strategic serial acquirer in the tech industry

Abstract

Through a single case study, we expand on pre-existing M&A research by examining how M&A processes have been affected by the increased information asymmetry as a result of the Covid-19 pandemic and what implications it will have on these processes going forward. By conducting a case study on a strategic serial acquirer in the technology industry, this thesis shed light on how firms within this industry react towards such a market shock and alter processes in order to adapt to the new circumstances. Based on a triangulation of document analysis and interviews with key employees of the case firm we find that the M&A strategy in terms of screening process and target criteria was not changed due to the pandemic. The most affected processes are the initiation of contact with target companies and the due-diligence process. There is a perceived loss of deep insight into target firms, trust and relationship building due to the vanishing of physical meetings, which is argued to be the largest change to the firm’s M&A processes. In addition to this, specific Covid-related aspects are taken into consideration, such as a more intense and differentiated focus on the liquidity and generation as well as origins of cash flows of targets during the due diligence process, compared to before the pandemic. Further, implications for the future mainly concern the possibility of increased productivity, inclusion and alignment of interests in the post-merger integration work, and the importance of trust and long-lasting relationships as an inherent part of the M&A strategy.