The Amazon and Whole Foods merger is a convergence deal blurring online and offline channels.

Companies looking to grow — as well as find ways to stay relevant — might be jumping into the mergers and acquisitions game.

That’s the conclusion of a report from global consultancy firm A.T. Kearney titled “2018 Consumer and Retail M&A Report: Can M&A Reignite Growth in Consumer and Retail?”

The results in the report were based on interviews with c-level retail executives, with 75 percent stating that they are using M&A to help their companies “acquire new capabilities, expand their product portfolios, access new customers or increase their geographic reach,” A.T. Kearney said. Further, 71 percent of respondents said M&A is creating value, up from 48 percent a year ago.

Bahige El-Rayes, an A.T. Kearney principal and a co-author of the report, said fueling M&A activity is the record amounts of cash reserves at both private equity firms and consumer products companies.

While there are already record levels of cash held by private equity firms that need to be put to use, El-Rayes said the cash hoards at U.S. consumer goods firms also are expected to increase now that companies with international operations can repatriate funds to the U.S.

“The repatriation of funds will put U.S. companies at an advantage because the surge in liquidity will allow them to fund new M&A activity. Second, with the lowering of the structure of the tax rate, that [will also result in] extra cash that can be used in new areas that include M&A,” he said.

He expects more cross-border transactions, with “U.S. based firms expanding and buying assets abroad.” One reason is the new U.S. tax laws, which are expected to boost domestic valuations and in turn make acquisitions by foreign firms more expensive. On Monday, the U.S. Justice Department gave its nod to Bayer AG’s mega-deal to buy Monsanto Co. in a transaction valued at over $60 billion, provided the companies sell certain assets so as to not run afoul of antitrust issues. The deal, which would form the largest pesticides and seeds firm, is still awaiting approval from the European Union.

El-Rayes believes that legacy companies looking at how to grow and survive will likely find their best opportunities in adjacent businesses. “Companies will be looking at industries they don’t play in,” he said, citing the planned acquisition of health insurer Aetna by drugstore retailer CVS as one example. Another is the General Mills acquisition of Blue Buffalo Pet Products. A third example is the $13.7 billion Amazon deal for Whole Foods, which the A.T. Kearney authors call a convergence deal because it blurs the line between the online and physical channels.

For beauty firms, El-Rayes said mass firms, which are fighting for survival, will likely look to add a premium line as a way to offer differentiated product. Those specializing in makeup could find expansion opportunities in the area of skin care. For apparel retailers, expansion could come in the form of footwear, accessories or even beauty.

According to El-Rayes, there’s a sense among the respondents at legacy companies that they need to move sooner than later to reignite growth because of the feeling that they have “one or two years left before they get disrupted.” And for those going after bigger companies to move the needle, there’s a general feeling that there are only so many opportunities left because of the number of deals that have already taken place. Those two thought patterns will push more and more companies to consider business adjacencies to complement existing businesses so they can form new value chains, the A.T. Kearney principal said.

El-Rayes also expects corporate venture funds to shift gears from acquiring a start-up just to incubate for growth. That model doesn’t necessarily translate to growth for the legacy brands. The model that would work, he said, is for these corporate funds to buy start-ups that could teach legacy brands some new tricks that they could incorporate into the culture of the existing businesses, whether it is a new e-commerce platform or some form of digital and social media content.