US: Investment funds gain ground in M&A - study
Investment firms and banks gained ground in the number of mergers and acquisitions in the US food industry last year, a study has shown.
The upward pace of M&A in the US food industry continued to increase throughout 2007, The Food Institute said today (11 March).
Some 413 transactions were completed during the year, with an additional 60 agreed upon, but not yet closed, by the end of 2007, the report said.
The number compares to the 392 deals that were completed in 2006, along with the 59 that were under agreement at the end of that year.
Food processors again led the way, with 94 deals closed and another 16 in development, although the total number of transactions in this category fell 14.5% from 2006, the report said.
Investment firms and banks were the second most active group, acquiring 89 food companies.
Retailers were also aggressive, with 79 transactions, as were restaurants with 57 deals completed.
"Food processors have accounted for the highest number of mergers & acquisitions in the food industry for several years running. However, investment firms and banks have steadily increased their interest in food businesses and are on pace to complete more acquisitions in this industry than food processors within the next few years," said Danielle Breuel, research and education director at the NJ-based trade association.
Although the number of acquisitions by food processors decreased in 2007, the individual transactions were significant.
"One thing to be said about the deals being carried out in the food processing and beverage sectors is that these acquisitions have a very specific strategic focus," Breuel said.
"Larger consumer packaged goods firms are purchasing smaller, health-focused companies and brands, namely Coca-Cola's purchase of glacéau and Fuze beverages, PepsiCo's purchase of Naked Juice, and Kellogg's purchase of Bear Naked granola."
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