The number of merger and acquisition (M&A) deals completed within the renewable industry in Q1 2020 dropped by nearly 25% from Q4 2019. These M&As are being affected by factors such as risk aversion from prospective buyers, difficulty in conducting due diligence, deal financing challenges, and additional time required to obtain the necessary approvals. However, activity is expected to pick back up later this year, as small developers struggle to secure financing, says
Somik Das,
"The ongoing impact of the COVID-19 outbreak on global financial markets is making it harder to establish a financial agreement when it comes to M&As. Existing uncertainty and market volatility make it difficult to analyze the value of a company or asset, which slows down transactions. Continuation of the crisis could impact takeovers, with investors re-evaluating potential transactions and stakeholders opting to stack their finances during the lean period.
"Potential buyers are being forced to redirect their resources towards mitigating the impact of COVID-19 on their businesses, which pushes them away from development goals such as maintaining growth through acquisition strategies."
ENDS
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Notes to Editors
Comments provided by Somik Das, Power Analyst at
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This insight was based upon data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by
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