Posted: Mar 06, 2017
Food industry M&A hit a record total in 2016, reaching its highest point in over 15 years, according to data from The Food Institute. Total deals for the year climbed to 505, moving past even 2014’s high of 503 deals, but remaining well under 1999’s record 813 deals.
Food processors were the most active, as always, increasing 6% from 2015. Small, specialty companies continued to be popular among manufacturers, as many producers opted to acquire artisan brands rather than start from scratch. The largest merger in the category was Danone’s proposed acquisition of WhiteWave Foods Co. for $12.5 billion. If completed, the deal will double the size of the French company's U.S. business. Increased activity in the snack food category also illustrates an overall shift towards better-for-you snacks, a trend that is also apparent in the food industry as a whole.
Retailers jumped back up to the second-busiest category, hitting triple digits for the first time in decades. The merger of Royal Ahold and Delhaize was by far the largest in the category at about $30 billion, creating a network of 22 brands with 6,500 stores in 11 countries. Convenience stores made up a majority of the activity among retailers, with additional major acquisitions from Delek US Holdings, Imperial Oil, TravelCenters of America, Core-Mark Holding Co., Tesoro Corp. and CST Brands.
Restaurants and foodservice operators were also quite busy, as the industry coped with falling sales and higher operating costs, while investment firms and banks saw deals increase 30% from the previous year.
The Food Institute's comprehensive Food Business Mergers & Acquisitions 2016 provides detailed analysis on the 505 mergers and acquisitions recorded in 2016. Organized into over 25 categories, the Food Business Mergers & Acquisitions 2016 guide is a valuable resource for examining individual deals as well as exploring larger trends in specific industries or international markets. With consolidation a powerful force in the food industry, a lack of awareness of market trends and contemporary acquisitions may result in lost opportunities or a mismanaged deal. With the Food Business Mergers & Acquisitions 2016 report, one gains a better understanding of the current climate for mergers and acquisitions and a greater perspective of segments within the food industry.
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