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January 8, 2013

UPDATE: UK: Overseas investment to drive food M&A

Analysts at Experian believe that overseas investment will maintain the momentum of mergers and acquisitions in the UK food sector.

Analysts at Experian believe that overseas investment will maintain the momentum of mergers and acquisitions in the UK food sector.

Last year saw the highest volume of mergers and acquisitions (M&A) in the UK food and drink sector since 2007, Experian analysts said following the release of a new report on M&A deals in 2012. During the 12 months, food and drink also led the way in terms of the highest value deals.

Looking ahead, the analysts see a buoyant M&A climate continuing for the food sector. “The food and drink industry has proved a key driver of overall M&A activity in the UK in recent years and we would expect to see continued high levels of deal flow within the sector in 2013,” Experian’s business development manager, Wendy Driver, told just-food.

One of the biggest deals of last year was the GBP1.2bn (US$1.9bn) acquisition of Weetabix by China’s Bright Food Group. Foreign investment is set to continue to be a key theme.

“Activity is likely to be fuelled once again by industry consolidation and in large part from overseas investment,” said Driver. “We would also expect private equity to play a more pronounced role in the market, after a 2012 in which firms tended to hold fire to maintain the integrity of their existing investments rather than focussing on adding to their portfolios.”

Aside from the blockbuster Weetabix deal, most M&A activity in the UK food sector in 2012 was in the small-to-medium-sized value range. Other key deals completed during the period include German dairy giant Müller acquiring Robert Wiseman Dairies for GBP279.5m.

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