ANDREW BAHLMANN: What Russian invasion of Ukraine portends for SA M&A

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ANDREW BAHLMANN: What Russian invasion of Ukraine portends for SA M&A
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What Russian invasion of Ukraine portends for SA M&A

A near empty street during a break in curfew in Kyiv, Ukraine on Tuesday, March 1 2022. Picture: BLOOMBERG/ERIN TRIEB

Russia’s invasion of Ukraine carries huge risks for M&A activity in a world economy that’s yet to fully recover from the pandemic shock — or understand the full severity of the Ukrainian war. While it may cause a blip for deals actually involving Russia or Ukraine, I believe the long-term effect will be to persuade more companies of the need to diversify their risk through joining a larger group.

The Russia-Ukraine conflict is expected to affect the completion of announced or planned cross-border M&A deals involving targets based in Russia or Ukraine. The fate of these deals is now in limbo as completion of some of these is likely to be delayed or called off. We do not really expect that to let up. I do think these headwinds from the geopolitical environment, volatility and Competition Commission can certainly have an impact. But we’re not seeing any let-up now. On the contrary, in our discussions with clients and potential clients we’re detecting a nervousness about increasing and unrelenting financial volatility prompted by one international crisis after another — and they are expressing the desire to reduce geopolitical and sector risks.

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