Food and Beverage M&A Landscape – Summer 2019

Merger & Acquisition (M&A) deal activity in the U.S. and Canadian food and beverage industry remains strong, with 300 deals closing in the last 12 months (LTM) through June 30, 2019. 

The market witnessed several major transactions in the first half of 2019, including the acquisition of the wine and spirit brands of Constellation Brands Inc. along with six wine making facilities for $1.7 billion by E. & J. Gallo Winery closed on April 26, 2019, and the acquisition of the cookies and fruit snacks business of Kellogg Company by Ferrero International S.A., which was announced on April 1, 2019, with a transaction value of $1.3 billion.

Food and Beverage M&A Landscape – Summer 2019

M&A activity in the Food and Beverage sector is still predominately driven by strategic buyers (including companies primarily owned by private equity investors), with strategic transactions representing 89% of total deal value over the LTM. Of the 300 deals closed in the LTM, 212 (71%) were completed by privately owned buyers.

Overall deal volume in the LTM through June 30, 2019 increased 7.5% relative to the same period last year.

The beverage sector continues to be an active space for M&A, with 53 transactions completed by alcoholic beverage companies and 37 deals completed by non-alcoholic players in the LTM. The strong M&A activity in the alcoholic beverages space is driven by a fragmented market, made up of a large and diverse base of small players, which makes the $1.7 billion acquisition of Constellation Brands’ wine and spirits portfolio by E. & J. Gallo Winery a very significant transaction. As of the writing of this report, it is within the top 10 largest alcoholic beverage M&A transactions to take place in North America and top 50 globally.

 

Source: Capital IQ as of June 30, 2019
Note: M&A deal count is defined by a list of sub-sectors viewed as the best representation of the industry.

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by Mark Kwilosz

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