2014 record year for M&A transactions
2014 proved a record year in terms of mergers and acquisitions (M&A) activity, according to data from Deloitte.
The firm stated that high M&A deal values made an emphatic return in 2014, particularly in the healthcare, TMT and consumer products sectors. In the first three quarters of 2014, companies spent US$2.5 trillion (€2.1 trillion) on M&A activities, making 2014 the best year for deals since 2007.
“The high value of deals will remain in 2015, with a cautious but steady pick-up. In 2015 I would expect to see these sectors continue to perform well, but in addition to more activity in the mining and resources sector, with speciality finance also being one to watch. By geography, the faster pace of recovery in the US over Europe will also deliver more trans-Atlantic interest in the industrial and manufacturing services,” said Paul Lupton, Head of Advisory Corporate Finance for Deloitte.
Consumer product M&A activity also saw increased activity levels in 2014. According to Deloitte, Emperado’s acquisition of Whyte & Mackay and, more recently, Yildiz’s acquisition of United Biscuits signalled the welcome return of overseas buyers making major investments in the European market. Benign credit conditions, large corporate war-chests and increased US buyer interest in Europe also point to an increase in activity levels.
Conor Cahill, Corporate Finance Partner at Deloitte, said that a number of major corporates are now re-aligning their brand portfolios and divesting non-core assets, with Reckitt Benckiser’s divestment of Ribena/Lucozade and Unilever’s disposal of its Ragu and Bertolli businesses as examples of this.
“Looking ahead, despite the easing of general commodity prices, consumer product companies continue to face pricing pressure as the intense competition between discounters and larger retailers persists. The ability to demonstrate innovation and investment will remain critical for branded goods producers to differentiate themselves from their private label counterparts,” said Mr. Cahill.