Consumer deal-making has gotten off to a good start in 2015 according to a new Mergermarket Ltd. report. In the first half of 2015, global consumer deal size increased 42.8 percent over the same period last year with deal volume totaling $202 billion — the largest gain since 2008.
This story first appeared in the July 8, 2015 issue of WWD. Subscribe Today.
The big jump in deal-making was mostly attributed to two megadeals. First, Heinz’s $54 billion acquisition of Kraft Food Groups Inc. and then the $40.8 billion acquisition of CKH & Hutchison Whampoa by Cheung Kong Holdings Ltd. accounted for a large portion of first-half transactions.
It isn’t just the food sector where there could be a lot of activity. In the U.S., there looks to be opportunity in the auto retail space where profitability is rising. There are 17,000 franchise dealerships, but only 10 percent are public companies. The industry is highly fragmented, but has opportunity for consolidation. Another sector that is ripe for consolidation is housewares. Industry executives told Mergermarket that they expect consolidation during the next year as larger players make acquisitions in order to add to their revenue growth.
Meanwhile, the fashion apparel sector could see an uptick in M&A activity, although the types of deals would be smaller and involve “bolt-on” acquisitions, according to separate reports.
“The prices that are being paid right now are very strong,” said Neal Asbury.