CPG and retail mergers and acquisitions (M&A) increased 3.3% in the first half of 2014 to $140.7 billion, marking the highest-valued first half of activity since 2008 ($147.7 billion), according to a global consumer trend report from MergerMarket.
Activity in the first half of 2014 improved 44.7% over the second half of 2013. The retail sector had its most active first half since 2007, accumulating $49.1 billion.
Data points from the report are based on announced transactions over $5 million within the consumer packaged goods (CPG) and retail sectors. Deals with undisclosed values are included if the target’s turnover exceeds $10 million.
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Despite the strong half-year performance, Q2 2014 activity throughout the sectors decreased 35.3% over Q1, fall from $85.4 billion to $55.3 billion. Additional concerns stem from a 42.3% decrease in cross-border consumer M&A activity between Q1 and Q2 2014. Consumer M&A appears to be a “lagging indicator” for the decrease in worldwide consumer spending in Q1 2014, according to the report. Domestic numbers fell 28.4% during the same time period.
Consumer M&A contributed 8.9% to the global M&A market in the first half of 2014, which is in line with the 8% contribution in the second half of 2013 but below the 13.5% share contributed in the first half of the year.
Activity in the CPG sector in Q2 2014 amounted to $21.7 billion, a 53.3% improvement from Q1 2014, marking a fourth consecutive increase in quarterly values. However, transaction totals from the first half of 2014 were down 43.6% from those made in the first half of 2013.
Goldman Sachs was a top advisor based on its involvement in M&As. The company advised four of the top 10 consumer deals. Goldman advised 19 deals that were worth a combined $36.2 billion. Rothschild advised the most transactions, with 31 deals totaling $18.6 billion.
