It is no longer news that the economic paralysis caused by the pandemic has been causing structural problems with companies, such as falling revenues, mass layoffs, restructuring and, in extreme cases, bankruptcy. And many of them started to see a way out using the mergers and acquisitions market.

A study by the global consultancy KPMG points out that, in the first half of 2020, Brazil registered 513 mergers and acquisitions of companies, a number that represents a drop of only 5.5% in comparison with the same period in 2019. If we observe the extremely negative scenario due to the pandemic during most of the semester, the fall is not considered very relevant.

Among these 513 operations, 368 are considered domestic operations, among Brazilian companies. The rest involved foreign-owned companies. For the specialist in Corporate and Corporate Law, and professor at Insper and Faap Marcelo Godke (photo), with all due care observed, the process can really be a viable solution.

"When 2 or 3 companies operating in the same sector experience a drop in revenue, it may be the right time to cut costs and go through this process. Technically it is not a merger, but an incorporation, but it can be very interesting, especially with the possibility to reduce costs and duplicate structures, helping to save companies ", reports the professor.

However, entrepreneurs must take a series of precautions with these operations. The warning expert is Tax Natal Eduardo Natal (photo). "There are several issues to be observed, including the careful evaluation of assets and the company, the care in preparing contractual instruments, market and competitive issues, among others," warns Natal.

Franchises during the pandemic 

Hardly affected by the pandemic, the franchise sector recorded an average turnover drop of 48.2% in April, according to data from the Brazilian Franchising Association (ABF). With the gradual reopening of the economy and the improvement of digital sales channels, the sector has gradually registered a reduction in losses, but it is still far from recovering.

"As the malls suffered a great impact, this affected the franchise sector very strongly. Many closed, especially those who did not have capital to hold the wave. As long as the economy is not fully reopened and the malls are fully functioning, it will be very difficult for the sector to recover fully ", evaluates Marcelo Godke.

To alleviate the situation of franchisees, the professor indicates that the best way is negotiation. "The companies that manage the malls know that storeowners have had a huge drop in revenue and that if they are to fully collect the rent, they will close their doors. ", explains Godke.

Eduardo Natal, on the other hand, expects the sector to improve once the most critical phase of the pandemic has passed, and that this may have a positive impact on the recovery of demand. However, the expert does not believe that the return is automatic. "The Brazilian's income fell and unemployment increased due to the crisis, and this will certainly be reflected in the coming months".