Mergermarket, New York, released its Global Consumer M&A trend report for 2016.
A few key findings include:
· This past year was a lackluster one for consumer mergers and acquisitions. In 2016, the sector saw 2,113 deals for a combined $223.1 billion, down 56.3% in value compared to 2015 ($510.4 billion, 2,191 deals). The year also saw its lowest consumer value since 2011, when the sector recorded 1,791 deals worth $190.8 billion. Further, Q4 2016 only saw 502 deals worth $62 billion, a 73.6% drop in value from Q4 2015 ($234.6 billion, 576 deals), which was the highest-valued quarter for consumer M&A in Mergermarket history (since 2001). For 2016, consumer M&A only contributed 6.8% to global M&A value, the lowest global market share for the sector on record.
· A decline in consumer megadeals (defined by Mergermarket as transactions valued above $10 billion) this year was the main culprit in the sector’s decline. In 2015, there were nine megadeals worth a combined $302.9 billion, which on their own, accounted for 59.3% of total consumer M&A in 2015. This year, there was only one such deal, when France-based Danone acquired The WhiteWave Foods Co., Broomfield, Colo., which accounted for only 5.4% of the sector’s total value.
· The United States led the way in consumer M&A by a wide margin with 505 deals worth $86.3 billion, accounting for 38.7% of global M&A for the sector. Despite being the top region for consumer M&A, the United States was down 52.6% by value compared to 2015 ($181.8 billion, 556 deals). Europe was a distant second with 960 deals worth $45.5 billion, accounting for 20.4% of the sector’s total value and down 77.7% by value compared to the year prior ($204 billion, 981 deals). The fall in value could be attributed to the lack of megadeals in the region, as mentioned previously. While Europe only recorded two megadeals last year, the two transactions were valued at a total of $134.7 billion.