Many high-profile mergers and acquisitions (M&A) were announced during 2013, especially in the global consumer sector. However, the total annual value of these transactions has declined considerably compared to 2012, according to a report from Mergermarket.
A total of $242.4 billion was exchanged in M&A agreements in 2013, an 11.6% decrease versus 2012 ($274.1 billion). This decline marks the first drop after three years of consistent year-over-year growth in M&A deal value.
The report, titled: Global Consumer M&A Roundup 2013, provides an overview of M&A activity in 2013, while highlighting prominent organizations and deals. Mergermarket collected data from 1,703 deals, each valued at more than $5 million. Deals with undisclosed values were included if the acquired business’ yearly revenue exceeded $10 million.
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During Q4 2013, the consumer sector experienced the largest decline, with deal value dropping 39.2% from $64 billion in Q3 2013 to $38.9 billion. Results from Q4 2013 also were 41.8% lower than Q4 2012, which closed with $66.8 billion exchanged in M&A deals.
A list of consumer sub-sectors analyzed in the report includes:
- Food, which saw a 49.5% decrease in U.S. deal values;
- Retail, which experienced a 7% increase in deal value worldwide versus 2012; and
- Other, which accounted for approximately 550 deals completed globally throughout the year.
The consumer M&A decline may be primarily attributed to a 15% decrease in deal values within the food sub-sector. Overall, deals were valued at $91.2 billion in 2013, versus $107.3 billion in 2012. The largest deal for the category in 2013 was Berkshire Hathaway’s acquisition of Heinz, which was worth $27.4 billion.
North America Remains Most Popular Investment Region
North America was the only region to experience an increase (12.8%), with deals valued at $113.8 billion, compared to $101.0 billion in 2012. Of the top five deals in 2013, three of the companies — Heinz, U.S. Foods Inc. and Smithfield Foods Inc. — were headquartered in the U.S.
Asia’s M&A value declined 16.8% ($48.4 billion) as a result of a somewhat uneventful year in the retail sub-sector compared to 2012. Europe, however, experienced the steepest (22%) decline during 2013, which could be attributed to the deflated value of deals targeting the retail sector. Overall, the value of M&As in Europe retail category decreased 36%, shifting from $32 billion in 2012, to $21 billion in 2013.
Click here to access a complete version of the Mergermarket report.
