The consumer & retail M&A picture across Europe is largely positive, with deal value increasing significantly, although volumes have yet to reach 2019 levels. Buyers are focusing on health, sustainability and e-commerce, while leisure and hospitality are recovering, and pet care is a rising star. Transactions between Europe and the Americas grew 5 percent in 2021, and outbound activity should increase further in 2022.
France: A bullish run in 2021 saw France enjoy a 26 percent increase in deal volume, driven by financial investors, and acquisitions of brand owners and retailers in food and beverage. The French consumer market has recovered well, with saving rates at all-time highs and spending strong, and an upcoming presidential election likely to boost M&A.
Germany: Germany's activity was less buoyant than some of its European neighbors, with a 2021 fall of 15 percent in deal volume year-on-year, primarily due to weak domestic activity. In 2022, expect private equity investors to show a keen interest in large carve-outs from German corporates eager to deliver maximum value from established brands.
Italy: Italy saw moderate year-on-year M&A growth of 7 percent in 2021, fueled by deals in home improvement and consumer products, including pet, textile and apparels, and, especially, luxury, which is attracting considerable interest from French buyers. 2022 should see continued growth in Italian acquisitions in the US, in search of a larger consumer base.
The Netherlands: A healthy 19 percent increase in M&A in the Netherlands saw 101 deals totaling US$7.3 billion - mostly due to a 71 percent rise in cross-border activity, especially from North America and UK. Valuations should remain strong for high-growth assets that have experienced sustained growth over the COVID-19 era.
Spain: Spain's M&A soared by 38 percent year-on-year, spearheaded by food & beverage retail and consumer products, along with an impressive 41 percent leap in inbound investment, mainly from Europe. We expect a similarly robust year in 2022, again, driven primarily by European buyers looking to increase their footprints.
UK: releasing pent-up potential
2021 proved to be a stellar year for consumer & retail M&A, outperforming 2020 and indeed the pre-COVID-19 era. Total deal value reached US$27.5 billion, a phenomenal 121 percent increase year-on-year. Private equity buyers have been especially active, featuring in 60 percent of UK deals in 2021, eying opportunities to support growth plans or buy platforms to consolidate.
The boom in public takeovers is expected to roll into 2022, and US SPACs are circling the UK market in search of value arbitrage between US and UK - a trend enabled by easing of regulations.
Quality is king when it comes to UK consumer deals, with continued high valuations for strong businesses, aided by attractive capital markets.
Find out more about 2022 M&A prospects in the Americas, Europe and Asia Pacific, and download the full report.
The M&A market in Europe is really positive and the activity levels are expected to remain high, despite pressures such as cost inflation in ingredients, logistics and labor. Consumer businesses are working hard to mitigate risks ahead of deal processes and considering value creation plans to implement ahead of an exit.
Deal Advisory Consumer & Retail Lead
KPMG in the UK
Striding forward with confidence
Global consumer and retail M&A outlook 2022
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