The uncertainty brought by Covid-19 is already filtering
through to private equity (PE) and M&A deals. As buyers
look to protect themselves against unexpected changes, they
will be making increasing use of material adverse change (MAC)
clauses in negotiations.
"In my experience deals haven’t been called off
because of Covid-19, but there have been delays because of the
inability to travel," said Peter Wittmann, managing director at
private equity firm Asia-IO. "Consumer sector deals have been
much more heavily affected and we’re seeing the
impact right away, but things aren’t looking so
bright for the rest of the year."
He added: "The impact of the virus may be short term, which
means many PE deals – which focus more on the longer
term – can proceed, and continue to look ahead for the
next two to three years."
While the situation in China is improving and the...