The Value of Acquisitions in Times of Uncertainty and Economic Downturns

Making acquisitions during times of uncertainty and economic downturns presents an opportunity for bold companies to win big. Research has shown that a mix of organic and inorganic growth is crucial for survival, as relying solely on organic growth can be value-destroying. Moreover, companies that engage in a minimum number of acquisitions per year, representing a significant part of their value, tend to realize excess total shareholder returns. Success in acquisitions requires a through-the-cycle view, where companies not only acquire during good economic times but also during downturns. The research indicates that companies consistently engaging in acquisitions outperform non-acquiring companies in the long run, emphasizing the benefits of M&A activities during challenging economic conditions.