Global minus sign for operationsM&A (Mergers and Acquisitions) in the Consumer Markets sector which recorded a further decline in23% in volumes compared to the already low level of last year, with a 12% decline in value, mitigated by the presence of two large operations in retail and packaging.
M&A, Italian market in negative sign
TO Italian levelin the first half of 2024, M&A activity in Consumer Markets saw a 19% decrease in volumes, with Food still leading the ranking (46 operations out of 179).
Globally, M&A activity is expected to restart in the second half of the year, but still with caution and focus on more conservative segments by financial investors and with longer preparation times for potential exits.
In this context, fund exits, especially the large ones, continue to be rather complex and often replaced by investments by continuity funds sponsored by the same funds or by partial exits (for example Acqua & Sapone), while mid-market operations and/or those promoted by strategic operators, which require less debt, are easier and continuously growing.
The PwC analysis
In the recent Voice of the Consumer Survey, 64% of consumers complained about fears related to inflation, war, climate change and a general sense of anxiety related to market volatility, which influences spending decisions. In this context, the key issues that were raised as requiring greater attention are related to:
- Health and wellness
- Supply chain sustainability;
- Need to strengthen trust in brands;
- Managing the impacts of technology;
- Erosion of purchasing power of some consumer segments linked to inflationary dynamics.
PwC expects these Themes remain of top interest to both companies and financial investors, as a guide for M&A decisions in the coming months.
Food in the lead
As mentioned, the Italian M&A market in the first half of 2024 closed with a decrease of 18.6% in terms of announced transactions in the Consumer sector compared to the first half of 2023.
Food remains in the lead with 46 completed deals out of a total of 179. The share of fund-sponsored deals also remains stable (c. 43%), which do not include platform acquisitions and add-ons (classified among the deals of “corporate” industrial investors). Domestic deals (Italy on Italy) represent 66% of the total. They are followed by Fashion (35 deals) and Home and Personal Products (14).
What scenarios?
“The scenario is moderately positive, but with different speeds across segments and a greater focus on preparing companies for potential deals in the latter part of the year or in 2025. We expect to see growing interest in Europe from operators in the Middle East, India and Japan, reflecting the increasing weight of middle-class consumers in these countries and thriving companies interested in investing abroad,” he explains.to Emanuela PettenòPartner PwC Italia, Consumer Markets & Markets Deals Leader.
