Outlook for M&A activity in 2015 by industry
23 December 2014
Paul Lupton, head of advisory corporate finance for Deloitte commented on the M&A outlook in general:
“High M&A deal values made an emphatic return in 2014, which is especially evident in the healthcare, TMT and consumer products sectors. In the first three quarters of 2014, companies spent US$2.5tn on M&A activities, making 2014 the best year for deals since 2007.
“The high value of deals will remain in 2015, with a cautious but steady pick-up. In 2015 I would expect to see these sectors continue to perform well, but in addition to more activity in the mining and resources sector, with speciality finance also being one to watch. By geography, the faster pace of recovery in the US over Europe will also deliver more trans-Atlantic interest in the industrial and manufacturing services.”
Outlook for M&A activity in the consumer products sector
Conor Cahill, corporate finance partner at Deloitte commented:
“The much heralded kick-start in consumer product M&A activity could already be underway as the year draws to a close. Emperado’s acquisition of Whyte & Mackay and, more recently, Yildiz’s acquisition of United Biscuits signalled the welcome return of overseas buyers making major investments in the European market. Benign credit conditions, large corporate war-chests and increased US buyer interest in Europe also point to an increase in activity levels.
“At the same time, a number of major corporates are now re-aligning their brand portfolios and divesting non-core assets, with GSK’s divestment of Ribena and Lucozade and Unilever’s disposal of its Ragu and Bertolli businesses as examples of this.
“Looking ahead, despite the easing of general commodity prices, consumer product companies continue to face pricing pressure as the intense competition between discounters and larger retailers persists. The ability to demonstrate innovation and investment will remain critical for branded goods producers to differentiate themselves from their private label counterparts.
“On this latter point, the successful IPO of Fever Tree highlights that there is still plenty of room in the market for innovative brands and, more broadly, a number of investors appear keen to buy into the next cycle of improving economic growth in 2015.”
Outlook for the financial services sector
Chris Goodgame, corporate finance transaction services partner, commented:
“Recent stress tests have made banks re-evaluate their capital buffers, many of which will turn to M&A to boost capital or indeed facilitate it for others. Opportunities are also to be found in financial technology as crowdfunding and mobile finance maintain their popularity and offer huge growth potential. In the consumer finance space, the regulatory environment has created scope for M&A to meet new compliance demands and government-backed initiatives in both pensions and mortgages.”
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