It's been a fascinating year for the consumer & retail (C&R) market, with many geographies experiencing a strong rebound as lockdowns ease and consumer confidence bounces back. Total global M&A volume, across all sectors, registered record growth, with C&R deal volume are enjoying a 20-year high. On the whole, prospects for 2022 look bright.
The global C&R M&A market grew 6 percent to reach 5,917 deals worth USD311 billion (a 12 percent increase in value). The rising number of transactions has been fueled by high growth in the US, UK and China, who together make up 40 percent of all deals worldwide. Financial buyers now account for half of all deals -- up 3 percent on 2020, with private equity (PE) investors particularly bullish.
Amongst sub-sectors, food and beverage (both brand owners and retailers) saw high M&A activity, on the back of the health & wellness boom. Consumer products M&A rose by 5 percent year-over- year, thanks to a growing interest in pet care. And internet & catalog retail deals continued their upward march, growing 22 percent, led by a 29 percent increase in deals involving financial investors.
Environmental, social and governance (ESG) has become an ever bigger driver, whether it's healthy eating, plant-based ingredients, sustainable supply chains or ethical workforce practices. Investors have also become more mindful of supply chain risks. Technology is the other major influence, opening up varied opportunities to snap up e-commerce targets with direct-to-consumer channels.
Another major trend is portfolio reshaping, to adapt to fast-changing consumer demands, and rationalize competition where companies are strongest. With an eye on the future, offline retailers are constantly shifting to online commerce, with their online retailers expanding in the other direction into bricks and mortar.
PE investors remain confident about consumer sector prospects, honing in on companies that have successfully rode out the COVID-19 storm. With promising macroeconomic indicators, these critical players should keep on playing a highly active role.
While uncertainty over COVID-19 remains, we expect investments to continue to rally in a market that has adapted to pandemic conditions and is prepared for any surge in variant virus cases. Even with potential interest rate hikes and inflation, 2022 should be a bright year for C&R M&A. Download the full report for insights on the 2022 consumer and retail marketplace.
Download the full report for insights on the 2022 consumer and retail marketplace.
Explore 2021 regional deal volume and values and anticipated ESG and chain impacts expected in 2022.
With the notable exception of China, Asia Pacific's consumer & retail deal volume and values have yet to reach pre-pandemic levels. Technology is a driving force for M&A, with buyers seeking e-commerce and new business models. Outbound M&A activity should grow in 2022, as investors shift from Europe to South East Asia, Africa and South America.
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.
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