The world of mergers and acquisitions is facing increasing uncertainty and changing market conditions amidst the U.S. tariffs, resulting in an overall decrease in M&A activity. This slowdown is not surprising, partner John Emanoilidis said in an interview with Lexpert.
"Generally, during periods of uncertainty, firms cut back or slow down on M&A," he said.
"It's not all across the board, but for businesses heavily reliant on trade and exports, tariffs make it more challenging to value them."
The tariffs may also affect the value of cross-border deals.
"For companies with meaningful exposure to U.S. trade, the prospect of tariffs means you're likely looking at some discounted valuations," John said.
In these situations, a seller may wish to defer any transactions until there is greater clarity around tariffs. If they do choose to proceed with the transaction, both the buyer and seller "will want to show greater caution as they assess the implications on tariffs," John explains.
This heightened caution means due diligence will become increasingly crucial as clients "look to lawyers to build safeguards into a deal to anticipate tariff risks".
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
