Despite or because of its regularity, D-Time is enjoying increasing popularity and so there was no shortage of topics at the D-Time on February 8. This time, the participants came from all parts of the German-speaking world, and a Canadian also joined in from afar. The participation of several young people who are planning an M&A career and are currently studying was also striking.
The requested topics revolved around M&A against the coronavirus backdrop. The key questions were: how can you manage an M&A project in a distant foreign country if you are not allowed to travel? Should you therefore pause M&A and wait until visiting restrictions have been lifted? Is it even possible to create an emotional basis and build the necessary trust via web contacts?
Many aspects of this were discussed among the experts, especially possible solutions. The basic rules we emphasized included: be patient, take your time, hold repeated web conferences and thereby gain trust. If you are not allowed to travel yourself – for example as an entrepreneur interested in buying – then service providers with German loyalty who are anchored in the target country can at least take on individual functions, for example proven industry professionals for screening, representatives of German chambers of commerce, representatives of local chambers trained in Germany, as well as delegates from leading strategy consultants, law firms and auditors.
This could be used to put together local teams to prepare and support the M&A project – cooperation with the client from Germany must be limited to web meetings for the time being. Discussions and negotiations with representatives of the target company can also take place to a limited extent, with the physical participation of the above-mentioned advisors and web connection of the client from Germany. This approach is no substitute for local meetings – but it is probably better than doing nothing and waiting until travel is possible again without severe restrictions (such as quarantines lasting several weeks), low risk (corona mutants…) and without surprises (sudden quarantines and return travel bans…). Because nobody knows how long the restrictions will last and doing nothing could derail a good plan.
In addition, a completely different path was discussed, namely the changes in M&A due to digitalization and new business models. This is also linked to old experiences that cultural breaks, changes of names and identities can be a heavy burden for employees of a target. This is why various forms of cooperation and joint ventures are gaining ground again today. Instead of risking a rupture through a sudden full takeover, there are many ways of gradually moving closer together, such as cross-marketing products, joint development and distribution agreements.
A company that is already active in the target country can use local employees and representatives to initiate the necessary steps. Under the current coronavirus restrictions, this may also make it possible to gently prepare for takeovers to be realized at a later date. After all, having entire M&A teams travel back and forth between continents is currently not possible in the vast majority of cases. Every case is different. Imagination is required to find new solutions. We should continue this discussion. Perhaps in the next D-Time.
