M&A deals in UK food and drink soared 20% last year to their highest level since the financial crisis started.
There were an estimated 87 deals in 2012 - the most for five years, according to Oghma Partners. The value of the transactions was also sharply up. Even with the £1.2bn acquisition of Weetabix by Bright Food stripped out, £3.1bn worth of deals were done, 50% more than in 2011.
Overseas buyers were particularly hungry for UK food and drink assets and accounted for 60% of the deals by value. Some of the biggest deals were Müller’s acquisition of Robert Wiseman, Hain Daniels’ purchase of Premier Foods’ spreads and jellies business and Intersnack’s deal to buy United Biscuits’ snack division.
Despite the increased activity in 2012, the number of deals remained some way off pre-crisis levels. In 2007, there were 114 deals - 30% more than last year.
However, Oghma Partners predicted that deal numbers would continue to increase in 2013.
“The coming year may well see a continuation of the trends witnessed in 2012, with somewhat higher deal volumes and with financial owners more actively engaged in disposal activity,” said Mark Lynch, a partner at Oghma Partners.
Private equity firms would be under pressure to realise assets and raise funds, so were likely to be active in the M&A market, he said.
Buoyed by healthier balance sheets and facing subdued organic growth prospects, industry buyers would also be on the hunt for opportunities, he added.