As we progressed through 2010, the amount of M&A activity intensified around the world as business confidence improved, lending conditions became more favourable and the value of deals crept up.
In the UK food and drink sectors, according to M&A advisory firm Oghma Partners, the value of mergers and acquisitions in the four months to the end of August stood at GBP1.08bn (US$1.67bn), against around GBP330m in the corresponding period a year earlier.
The data showed that the number of deals in the first eight months of 2010 was lower than in the same period of 2009 but Oghma Partners said there had been a “marked increase” in the average size of transactions. Aside from Kraft Foods’ takeover of Cadbury, the M&A consultancy pointed to deals including the sale of Tate & Lyle’s European sugar assets and Thai Union Products’ acquisition of canned seafood business John West as signs of “renewed confidence in M&A markets”.
With a few days of 2010 to run, Oghma Partners’ Mark Lynch says the advisory firm has yet to collect all the data for the last four months of the year and the year as a whole. However, he suggests the “punchy deal” between Ireland’s Greencore and UK food group Northern Foods indicates this trend towards bigger deals has continued in the latter part of the year.
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