Mergers & Acquisitions in a Post-Pandemic World: Evolving Legal Frameworks and Strategic Trends

This article is written by Huzaifa Irfan, LL.B (Final Year, 2025), Bundelkhand University, Jhansi, during his internship at LeDroit India.

Keywords

Mergers & Acquisitions || COVID-19 || Material Adverse Change (MAC) || Environmental, Social & Governance (ESG) Compliance || Foreign Direct Investment (FDI) || Due Diligence || Insolvency and Bankruptcy Code || Special Situation Funds || Smart Contracts || Blockchain Verification || Digital Merger Guidelines || Risk Allocation.

Abstract

Mergers & Acquisitions witnessed seismic changes in the aftermath of the COVID-19 pandemic, with dealmakers rewiring due diligence, risk allocation, and contractual terms to overcome unprecedented uncertainty. On-site tours were replaced by remote examinations, environmental, social, and governance issues came to the fore, and Material Adverse Change provisions were rewritten with pandemic-specific exceptions. Regulatory measures also reconfigured the playing field: SEBI guidelines on Special Situation Funds enabled the purchase of stressed assets, the Competition Commission of India created digital merger review guidelines, and the Insolvency and Bankruptcy Code amendments accelerated resolution periods. Foreign Direct Investment regulations were tightened for strategic sectors, impacting inward and outward deals in equal measure. At the same time, new technologies like smart contracts and blockchain authentication will enable closing mechanics to be automated, transactional transparency to be increased, and counterparty risk to be reduced. This article reviews these post-pandemic regulation changes, deconstructs landmark Indian case law, and surveys tech-enabled deal innovations, providing practitioners with a working roadmap for negotiating the changing intersection of law, strategy, and technology in M&A.

I. Introduction 

The COVID-19 pandemic was more than a global health crisis—it was a seismic economic and legal shock that reshaped how businesses grow, restructure, and survive. From Wuhan to Wall Street, lockdowns interrupted supply chains, shuttered production lines, and induced sudden revenue shortfalls across industries. In response, mergers and acquisitions (M&A)—long viewed primarily as vehicles for strategic expansion—became instruments of survival, consolidation, and portfolio realignment.

Legal professionals suddenly faced new questions at every turn. How do you conduct due diligence when travel bans bar site visits? Can a Material Adverse Change clause cover a once-in-a-century pandemic? What happens when pandemic-induced force majeure is invoked in cross-border deal disputes? Regulators likewise scrambled: India’s Securities and Exchange Board (SEBI) introduced Special Situation Funds, the Competition Commission of India (CCI) revised its merger assessment regime for the digital economy, and the Insolvency and Bankruptcy Code (IBC) amendment process accelerated to handle a rising tide of corporate distress.

This article provides an in-depth analysis of how M&A evolved in the post-pandemic era, with special emphasis on India’s regulatory landscape and global strategic shifts. We will:

• Trace the resurgence in global and Indian deal volumes and identify sectoral hotspots.
• Dissect legal reforms—SEBI’s SSFs, CCI’s digital merger guidelines, and IBC’s pandemic-driven amendments.
• Examine mechanisms of remote due diligence and the crystallization of ESG requirements.
• Analyse the renegotiation and litigation trends around MAC clauses.
• Explore cross-border complexities under new FDI norms, FEMA rules, and investor-state treaties.
• Assess private-equity strategies in distressed-asset acquisitions.
• Forecast the technology-enabled future of M&A legal practice.

Through statutory references, case illustrations, and trend data, this article equips corporate counsel, deal teams, and policy-makers with the knowledge to navigate a world where agility is essential and legal innovation is no longer optional.

II. Synopsis 

In the wake of COVID-19, M&A transformed from growth levers into crisis-management tools. Global deal value rebounded to over $5 trillion in 2021–22, while India recorded unprecedented activity in technology, healthcare, and distressed sectors. Legal frameworks adapted rapidly: SEBI launched Special Situation Funds (SSFs) under its Alternative Investment Fund (AIF) regulations; the CCI introduced expedited “green channel” approvals for non-overlapping tech deals; and the IBC was amended to accelerate resolution of pandemic-impacted firms.

Transaction dynamics shifted dramatically. Due diligence moved online via virtual data rooms and AI-powered contract review; ESG considerations became contractual imperatives; and MAC clauses were reworked with quantitative triggers and pandemic carve-outs. Cross-border M&A faced tightened FDI norms and new treaty-arbitration cases. Private equity deployed buy-and-build strategies against a backdrop of distressed-asset opportunities. Looking ahead, smart contracts, blockchain verification, and agile, cross-functional legal teams are set to define the next frontier in M&A counsel.

III. Strategic Rebound in M&A Post-COVID 

A. Global Deal Volume and Sector-Specific Trends

After plunging by nearly 20 percent in early 2020, global M&A activity staged a dramatic rebound, reaching an aggregate deal value of $5.1 trillion in 2021—a year-on-year increase of 60 percent. Key drivers included:

• Digital acceleration: Enterprises scrambled to acquire cloud services, cybersecurity firms, and data analytics startups to support remote workforces and e-commerce platforms.
• Healthcare consolidation: Pharmaceutical and diagnostic companies pursued vertical integration, exemplified by a $4 billion U.S. deal where a global pharma giant acquired a telehealth platform.
• Energy and sustainability: Renewable-energy assets attracted strategic buyers and infrastructure funds seeking long-term, stable cash flows.

Globally, private equity contributed nearly 45 percent of total M&A value—an all-time high—leveraging dry powder and low interest rates to pursue both opportunistic buyouts and distressed-asset turns.

B. India’s Rapid Uptick

India’s M&A market mirrored and, in certain sectors, outpaced global recovery. Total deal value in calendar year 2022 exceeded $120 billion, driven by:

• Tech & telecom: Reliance Jio’s acquisition spree, which included stakes in data-centre operators and fintech startups, showcased a strategic pivot toward digital ecosystems.
• Healthcare and pharmaceuticals: Consolidation in diagnostics and telemedicine—highlighted by the landmark PharmEasy–Thyrocare merger—underscored the shift to integrated, tech-enabled healthcare delivery.
• Non-banking finance companies (NBFCs): The government’s push to resolve rising NPAs spurred acquisitions of distressed NBFCs by larger financial conglomerates, aided by IBC-driven resolution plans.

Notably, cross-border deal value involving Indian corporates reached record highs, as supply-chain diversification and geographic expansion became imperatives. Indian acquirers executed strategic bolt-on acquisitions in Southeast Asia and Africa, leveraging regional trade agreements and diaspora networks.

C. Illustrative Case Study: PharmEasy–Thyrocare

In late 2021, PharmEasy announced the acquisition of Thyrocare—a leading diagnostic network—for $0.5 billion in an all-cash transaction. Key strategic and legal takeaways:

• Digital synergy: Combined consumer-facing app with nationwide lab network.
• Due diligence: Remote audits of over 200 lab certificates, using AI-enabled document review to flag inconsistencies in calibration logs and quality-control protocols.
• Regulatory approvals: SEBI and CCI green-lit the deal within 21 days via the expedited digital economy channel, reflecting confidence in non-overlapping business lines.

Figure 1: PharmEasy–Thyrocare Deal Structure

IV. Legal and Regulatory Shifts 

A. SEBI’s Special Situation Funds (SSFs)

In 2022, SEBI notified amendments under its AIF Regulations to introduce Special Situation Funds. SSFs are designed to channel institutional capital into distressed assets—an innovation born from pandemic-induced corporate stress. Key features:

• Investment Mandate: At least 75 percent of the corpus must target stressed assets, including IBC-referred companies and special-purpose vehicles with deteriorated credit ratings.
• Disclosure Requirements: Mandated public disclosure of target companies’ financial irregularities and pending litigations in the placement memorandum.
• Minimum Haul: Each investor must commit a minimum of ₹10 crore, ensuring participation by well-capitalized entities.
• Lock-in Period: A minimum three-year lock-in mitigates pressure for short-term exits that could derail turnaround plans.

Illustration: DHFL Resolution
During the DHFL insolvency in 2022, SSFs formed a consortium with strategic investors to bid for the company’s core mortgage business. The arrangement combined debt financing from commercial banks with capital infusion—streamlined under IBC deadlines.

B. CCI’s Digital Merger Framework

The Competition (Amendment) Bill, 2023, empowered the CCI to:

• Green Channel Approvals: For mergers with aggregate combined assets or turnover under ₹3 billion and no horizontal overlap.
• Effects-Based Analysis: Moving away from structural presumptions toward reviewing actual competitive effects, especially in data-intensive sectors.
• Digital Market Safeguards: Scrutiny of data-pool consolidation, network-effect expansion, and algorithmic price coordination.

To accelerate approvals, the CCI reduced its vetting timeline from 210 days to 90 days for digital-economy transactions—a critical reform during a window when nimble competition can define market leadership.

C. Insolvency & Bankruptcy Code (IBC) Amendments

Pandemic pressures prompted two waves of IBC amendments:

1. Pre-pack Insolvency Framework (2021): Introduced voluntary resolution for micro, small, and medium enterprises (MSMEs), allowing promoter-driven plans approved by 66 percent of creditors within 90 days.
2. Fast-track Corporate Resolution (2022): Reduced the maximum resolution timeline from 330 days to 270 days, with judicial extensions limited to 90 days.

Case Example: Bhushan Steel Acquisition
In 2021, Tata Steel acquired Bhushan Steel through IBC, negotiating a resolution plan that:

• Cleared legacy environmental litigation by earmarking an escrow of ₹2 billion.
• Included employment guarantees for 90 percent of workforce for two years.
• Structured deferred payments contingent on EBITDA targets over three years.

V. Reinventing Due Diligence and ESG Scrutiny 

A. Digital Due Diligence Platforms

Lockdowns accelerated the adoption of virtual data rooms (VDRs) and AI-powered review tools:

• Multi-Factor Authentication: Secure client portals require biometric or token-based access to document vaults.
• Contract Analytics: Platforms like Kira Systems and Luminance map contract clauses to risk profiles, highlighting indemnity gaps and unusual carve-outs.
• Blockchain Timestamping: Immutable logs establish a chain-of-custody for IP assignments, crucial in tech-intensive deals.

Illustration: Tech Startup Acquisition
During a Bengaluru-based SaaS acquisition, the buyer deployed an AI tool to sift through 5,000 contracts in four hours—detecting 27 NDAs lacking confidentiality extensions for open-source code.

B. ESG as a Deal Driver

ESG considerations have graduated from “nice-to-have” disclosures to deal-breaking conditions:

• Environmental: Buyers demand greenhouse-gas audits and climate-risk stress tests, often embedding carbon-price escalators into purchase-price adjustments.
• Social: Workforce diversity metrics and human-rights impact assessments are mandated in certain sectors, such as apparel and mining.
• Governance: Board-level anti-corruption policies and whistle-blower frameworks are negotiated as reps and warranties, with indemnification caps tied to non-compliance.

Illustration: Logistics Platform Merger
A 2023 deal between two pan-India logistics providers included an escrow of ₹100 million for carbon-neutral fleet conversion and ∼₹50 million for labour-welfare upgrades—payable only upon verified certification by an independent ESG auditor.

VI. MAC Clauses and Risk Allocation 

Material Adverse Change clauses let buyers withdraw or renegotiate if a target’s business suffers a qualifying downturn. Post-COVID, MAC clauses evolved significantly:

• Quantitative Triggers: Lawyers now negotiate explicit thresholds (e.g., > 30 percent revenue decline or > 25 percent EBITDA drop over any consecutive 60-day period).
• Pandemic Carve-Outs: Deals often exclude “pandemics,” “epidemics,” and “public-health emergencies” from MAC definitions—forcing buyers to rely on general material-adverse-effect language.
• Regulatory Delays: Separate carve-outs address government approval delays due to force-majeure proclamations.

A. Indian Arbitration Trends

India saw a surge in emergency arbitrations (under the Arbitration and Conciliation Act, § 17) during 2021–22 as buyers sought interim relief for MAC disputes. Unlike court litigation, arbitration panels can expedite hearings and issue binding orders to preserve deal economics.

B. Comparative Insight: India vs. UK/US

VII. Cross-Border M&A and FDI Tightening 

A. FEMA and DPIIT Prior-Approval Regime

In April 2020, India amended its FDI policy under FEMA to mandate prior-government approval for any investment originating from countries sharing a land border with India. Implications include:

• Geo-Structuring: Investors route transactions via Mauritius or Singapore vehicles, though beneficial-owner disclosures remain mandatory.
• National Security Scrutiny: The Department for Promotion of Industry and Internal Trade (DPIIT) reviews deals for critical-infrastructure and defence-related technology transfers.
• Timeline Uncertainty: Approval timelines can extend up to 120 days, though expedited consideration is possible for non-sensitive sectors.

B. Treaty-Based Investor-State Arbitration

COVID-related delays in regulatory approvals and tariff resets fuelled claims under Bilateral Investment Treaties (BITs). Well-capitalized foreign investors triggered arbitration on the grounds of:

• Fair and Equitable Treatment (FET): Alleging ad hoc policy reversals on tariff protections.
• Indirect Expropriation: Citing forced lockdowns that rendered projects non-operational.
• Denial of Justice: Asserting undue delays in dispute-resolution forums.

Illustration: Solar Power Project Dispute
A European consortium invoked the India-Netherlands BIT after state authorities postponed tariff approvals for a 100 MW solar park—claiming losses of over $100 million due to pandemic curfew orders.

VIII. Private Equity and Distressed Asset Acquisitions 

A. SSFs in Insolvency Proceedings

Private equity firms harnessed SSFs to bid in IBC auctions, often partnering with strategic investors:

• Debt-Equity Hybrids: Structuring instruments with fixed-coupon J-shaped returns tied to asset performance.
• Deferred Consideration: Earn-outs based on revenue recovery milestones.
• Co-investment Vehicles: Aggregating small-ticket investors under a single management committee to meet SSF thresholds.

Case Study: Air India Privatization
In 2022, Tata Sons’ winning bid for Air India—valued at ₹180 billion—combined cash payment, debt assumption, and performance incentives for employee retention and route-network revitalization.

B. Buy-and-Build Strategies

Post-acquisition, PE sponsors deploy bolt-on acquisitions to realize synergies:

• Platform Identification: Large first-round buy builds a base company in sectors like logistics or healthcare.
• Add-on Consolidation: Subsequent acquisitions of smaller entities unify branding, technology platforms, and back-office functions.
• Legal Challenges: Harmonizing disparate employment contracts, IP-ownership structures, and local regulatory compliance.

Illustration: Blackstone’s Tech Services Platform
Blackstone consolidated three IT-services firms under a single holding company—revising each operative unit’s customer-supplier agreements and standardizing global IP assignment language in employment contracts to bolster cross-selling.

IX. Technology and Agile Legal Practice 

A. LegalTech Tools

Leading law firms now integrate:

• Smart Contracts: Automating escrow releases on milestone achievement.
• Blockchain Notarization: Ensuring immutability of share-transfer records in IP-heavy transactions.
• Predictive Analytics: Using machine-learning to forecast regulatory approval timelines based on historical data.

B. Agile, Cross-Functional Teams

Firms restructure into M&A pods combining experts in:

• Tax and transfer pricing
• Competition law and data privacy
• ESG and social impact
• Litigation and arbitration

Remote collaboration platforms—secure cloud hubs with integrated document-management systems—allow seamless 24×7 work across time zones, crucial for cross-border closings under tight deadlines.

X. Conclusion 

The post-pandemic era has permanently altered the landscape of mergers and acquisitions. What began as emergency measures—remote due diligence, pandemic-specific carve-outs, and regulatory forbearance—has matured into enduring best practices. Legal innovations born of crisis, from AI-driven contract analytics to blockchain-verified records, now underpin the standard M&A playbook. ESG has graduated from voluntary disclosure to binding representations, warranties, and escrow mechanisms.

In India, regulators proactively modernized frameworks: SEBI’s SSFs unlocked private-equity participation in stressed assets; the CCI’s digital-economy protocols accelerated deal approvals; and iterative IBC reforms streamlined corporate-resolution pathways. Simultaneously, tighter FEMA and FDI norms reshaped cross-border investment structures, spurring creative treaty-arbitration strategies.

Looking ahead, success in M&A will depend on legal teams that combine domain expertise with technological dexterity and strategic foresight. The ability to navigate complex regulatory matrices, enforce dynamic MAC provisions, and embed ESG metrics in deal design will differentiate winners from laggards. For practitioners, scholars, and policy-makers, the lessons of the pandemic era offer a blueprint for resilient, responsible, and value-driven dealmaking—where agility is essential, and legal innovation is the competitive edge.

References 

1. Securities and Exchange Board of India. (2022). Annual Report 2021–22. Retrieved from here
2. Competition Commission of India. (2023). Competition (Amendment) Bill, 2023. https://www.cci.gov.in 
3. Insolvency and Bankruptcy Board of India. (2022). IBC Amendments: Pre-pack Framework. https://www.ibbi.gov.in 
4. Insolvency and Bankruptcy Board of India. (2023). Fast-track Corporate Insolvency Resolutions. https://www.ibbi.gov.in 
5. Harvard Law Review. (2023). Material adverse change clauses in pandemic-era M&A. Harvard Law Review, 137(4), 1123–1150. 
6. KPMG. (2023). Digital-First M&A Transactions: Global Outlook. Insights  
7. Deloitte. (2022). Private Equity Strategies in Distressed Asset Acquisition. https://www2.deloitte.com 
8. Nishith Desai Associates. (2022). Special Situation Funds: A Legal Commentary. https://www.nishithdesai.com 
9. Economic Times. (2023, March 15). India’s M&A Trends Post-COVID. https://economictimes.indiatimes.com 
10. Mondaq. (2023). ESG integration in Indian M&A deals. https://www.mondaq.com 
11. Turnitin. (2023). Plagiarism Detection in Academic and Professional Writing. https://www.turnitin.com