[Abdul Latif Zainal]

Mergers and acquisitions have become increasingly complex as trade wars disrupt traditional value assumptions. Escalating tariffs, currency volatility, and heightened regulatory scrutiny create uncertainty across supply chains, profitability forecasts, and access to key markets. I am in a middle of a valuation and such topics arise when it comes to “fair value” How should acquirers adapt DCF and comparable-company models to incorporate trade war–related risks?

[Jerry Pomije]

I have encountered this exact issue in a recent acquisition that I have been working on. In this case, the target relied on imported components from several countries with the manufacturing completed domestically. We modeled several different tariff rates, impact on pricing and a reduction in estimated units sold. We also increased the risk premium.

[Martin Huber]

Been thinking about this a lot too, but still looking for answers. A fragmented world seems to favour M&A as it opens up the possibility of having a local or regional presence that contours political influence better and allows a Group to appear more local. So there are not only risks but also opportunities.
Over all your thinking does seem correct that transactions become more risky simply as I would like to see my investment protected from geopolitical events.
Solutions as mentioned before increase the discount factor (the currency market can help here) or break up the DCF into functional components and value them individually. Then track if need be once the transaction has been completed.

[Author]

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