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Buyers Become More Demanding with Respect to Potential Targets, AVELLUM’s Survey Reveals

Buyers Become More Demanding with Respect to Potential Targets, AVELLUM’s Survey Reveals

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AVELLUM for the second time researched how the coronavirus outbreak affected the plans of businesses to purchase or sell assets or companies in Ukraine in the next 6 to 12 months. We surveyed over 90 owners, top managers, and heads of legal departments of Ukrainian and international companies in 2021.

Key findings from the report

  • In 2021, the share of companies intending to buy a business decreased from 50% to 37%. The percentage of companies planning to sell the business has not significantly changed (30%).
  • The number of companies planning to sell businesses due to the coronavirus has doubled (38% vs 18% in 2020). 50% of potential buyers are interested in buying specifically because of the pandemic. Sellers and buyers are taking the pandemic more seriously as an impact factor in M&A transactions.
  • Buyers are more demanding with respect to potential targets. They prefer comprehensive warranties as to the target (62%) and its full-scope due diligence (86%). There is a clear tendency towards creating conditions for the buyer's market. 
  • 70% of respondents defined the current situation in Ukraine as satisfactory for buying or selling a business. One third believe that the current situation in Ukraine is favourable, and only 11% of the respondents view it as unfavourable for such transactions.
  • Sellers and buyers are unwilling to take risks in times of crisis. In 2021, the share of companies that believe that both parties need external advisors has nearly tripled (from 32% in 2020 to 85%). 
  • As in 2020, more than half of the companies for sale (60%) are willing to offer a discount due to the crisis. At the same time, the share of buyers expecting a discount has decreased from 94% to 56%. Now it almost matches sellers’ plans to offer a discount.

For more information please visit AVELLUM website.

By Avellum

Ukraine Knowledge Partner

AVELLUM is a leading Ukrainian full service law firm with a key focus on Finance, Corporate, Dispute Resolution, Tax, and Antitrust.

Our aim is to be the firm of choice for large businesses and financial institutions in respect of their most important and challenging transactions.

We build lasting relationships with our clients and make them feel secure in new uncertain economic and legal realities.

We incorporate the most advanced Western legal techniques and practices into our work. By adding our first-hand knowledge, broad industry experience, and unparalleled level of service we deliver the best results to our clients in their business endeavours. Our partners are taking an active role in every transaction and ensure smooth teamwork.

AVELLUM is recognised as one of the leading law firms in Ukraine by various international and Ukrainian legal editions (Chambers, The Legal500, IFLR1000, The Ukrainian Law Firms, and others).

Firm's website: www.avellum.com

 

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