Global consumer products deals reach $101b – Ernst & Young

The total value of disclosed consumer products (CP) in mergers and acquisitions (M&A) deals announced in 2010 reached $101.6 billion globally compared with $45.7 billion in 2009, according to international audit firm Ernst & Young (EY).

This is a 122% increase, EY’s Consumer Products Deals Quarterly indicated on its website.

“Overall, 1,128 deals were announced in 2010, compared with just 818 deals in 2009 – up by 38%”, EY said.

According to the firm, with 356 global deals, the fourth quarter was not far short of the second quarter of 2007 peak of 376 transactions, with a value of $24.7 billion.

The food sector M&A deals accounted for 50% of the top 10 deals in 2010, Mr. David Murray, Global Consumer Products Transactions Leader at Ernst & Young said.

“The vast majority of the year’s top 10 deals had values in the $3-5 billion range, with the food sector accounting for half of the transactions”, he said .

EY said the food sector saw the highest level of deals (234 deals) since 2008 of which the total value of disclosed deals was US$16.3b, an increase of US$7.49b (85%) on the previous quarter.

For the first time in 2010, the firm indicated that the fourth quarter recorded the biggest deal involving a private equity with the purchase of $5.3 billion Del Monte Foods by a KKR/Vestar Capital Partners/Centrerview Partners consortium.

Household and personal care (HPC), according to EY, also performed strongly in 2010 with a 52% increase in deal volumes compared to the third quarter of the year.

“This is the highest level of HPC deals in any quarterly period in the last three years…However disclosed transaction value fell to $3.56 billion in the quarter – a 63% decrease on the previous quarter”, it noted.

The beverage sector was also up significantly on the prior quarter at 77 deals, 35% higher and had a disclosed market value of $4.9 billion.

Throughout 2010, EY analysis shows that strong interest from developed market companies in emerging markets is focussed on reaching one billion customers.

EY says “As we entered 2011, we remain positive, following two successive quarters of approximately 20% growth in volumes.”


By Ekow Quandzie

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