According to a recent report from corporate finance house, Oghma Partners, the UK Food and Beverage Sector M&A report shows that in Q2 2024, deal volume increased by 32.4% year-on-year, with 49 transactions completed. The estimated deal value surged to approximately £6bn, primarily driven by a few large deals such as Carlsberg/Britvic, Carlsberg/Marston’s, and Newlat/Princes. Excluding these, the deal value was closer to £580m, in line with previous Q2 periods.
Smaller deals dominated the landscape, with 61.2% valued at £10.0m or less, while mid-to-large market transactions were scarce. Only 14.3% of deals exceeded £50.0m, half of which surpassed £100.0m. UK corporate buyers led the market, accounting for 57.1% of deal volume (28 deals), a slight increase from 54.1% in Q2 2023. Financial and overseas buyers contributed 22.4% and 20.4%, respectively. The grocery and confectionery sectors were the most active, representing 24.5% of total volume, with notable activity in the bakery sub-category, such as Groupe Menissez’s acquisition of Village Bakery. The beverages sector also remained strong, highlighted by Carlsberg’s acquisitions of Britvic and Marston’s brewing.
Said Mark Lynch, Partner at Oghma Partners: “Looking ahead, the short to medium term outlook is largely positive. We expect deal volume to continue at these levels supported by improving economic conditions. The potential for further rate cuts by the BoE this winter should provide buyers, particularly financial buyers, with more opportunities to pursue M&A activity. We are also likely to see a flurry of short-term deal activity ahead of the Government’s budget announcement at the end of October, as business owners are concerned about a potential increase in capital gains tax. What remains unclear is whether any increase will take effect immediately or in the new tax year, April 2025. If it’s the latter, we could see a rush to market over the coming months as business owners seek to accelerate their exit plans to benefit from current rates. However, in the longer term, deal activity could decline due to less favourable selling conditions and the higher premiums required to close deals under the increased tax rates.” For more visit oghmapartners.com
