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January 27, 2020

UK food, beverage M&A volumes down in 2019 as Brexit uncertainty hits – research

Research by corporate finance advisory firm Oghma Partners has revealed UK food and beverage M&A volumes and values in 2019.

By Leonie Barrie

Research by corporate finance advisory firm Oghma Partners has revealed that UK food and beverage M&A volumes were down in 2019 on a year-on-year basis.

Pointing to 2019 being “a year of political and economical uncertainty in the UK” because of Brexit, the London-based firm reported there were 77 completed transactions in 2019 compared to 87 transactions in 2018, representing a 11.5% decrease.

While deal volumes were down, the total value of transactions rose from around GBP2.6bn (US$3.39bn) in 2018 to around GBP3.75bn.

However, Oghma Partners pointed out that if Saputo’s GBP1.18bn acquisition of UK dairy group Dairy Crest was stripped out of the 2019 figure, it would be roughly in line with the 2018 deal value total.

Reflecting on the origin of buyers in 2019, Oghma Partners said: “Interestingly, 2019 saw a decline in activity from overseas buyers as a percentage of total deal volume. Continued political uncertainty surrounding Brexit during the year does seem to be taking its toll.”

In 2019, 29.9% of acquirers in the UK food and beverage in the industry were from overseas compared to 36.8% in 2018. 

Meanwhile, deal activity from financial buyers experienced a slight increase in 2019. Financial buyers made up 16.9% of total deal volume  compared to 13.8% in 2018.

By food category, the highest percentage of deals were in grocery/confectionery (24.7%). This was followed by chilled foods (10.4%) and dairy (5.2%).

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