U.S. retail and consumer merger and acquisition (M&A) activity was driven by eight multibillion dollar transactions in the second quarter, primarily in the food and beverage sectors. The value of these transactions was up 104 percent from last year, 52 percent by volume, according to PwC's U.S. retail and consumer deals insights Q2 2014 report.
"The trend toward convergence of retail and technology companies continues to impact deal activity as companies look for acquisition opportunities to gain a competitive advantage and provide a holistic consumer experience through a new 'total retail' business model," said Leanne Sardiga, partner and PwC's U.S. retail and consumer deals leader. "In fact, the quality of businesses for sale is allowing for more corporate buyers who are thirsty for growth to more quickly enhance their value propositions."
In the quarter, there were a total of 50 deals in the retail and consumer sector with values greater than $50 million, for a total of $37.4 billion. Deal value and volume rose year-to-date, with a 20 percent increase in value and a 32 percent increase in volume over the first half of 2013. From the first quarter of 2014, deal value was down five percent from $39.5 billion and deal volume rose 25 percent.
"The retail and consumer sector experienced a solid first half of the year in deal activity, setting the stage for 2014 to surpass 2013 in transaction value and volume," Sardiga said.
Food and beverage retailing deals in Q2 did include some equity but were mostly driven by corporate actions. Corporate volume represented 28 percent of total deal volume and corporate value represented 56 percent of total deal value. For retail, spin-offs and divestitures remain a key strategy in Q2 for refocusing core businesses. PwC predicts more corporate spin-offs in the next quarter, primarily in the food and beverage sector.
-See this PwC press release
Just 1% of shoppers buy groceries online
Survey says shoppers want more personal, but less personalization
Mother's Day spending to top $18B, most will shop online
Digital influences $1 trillion in retail sales
U.S. retail sales hit $4.53 trillion in 2013, e-commerce jumps 17 percent