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Consumer Product Deals Quarterly - Q1 12 - All consumer product sectors show decline in activity - EY - Global

Consumer Product Deals Quarterly: Q1 12

All consumer product sectors show decline in activity

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Three of the top 10 deals were in the beverage sector, including two in the top three largest transactions.

The tough deal-making environment had an impact on activity levels and deal values across all sectors in the first quarter. Volumes held up relatively well in the beverage sector, while the Kellogg/Pringle deal helped underpin total value in the food sector.

Beverage

Transaction activity in the beverage sector decreased in Q1 12, dropping from 69 in Q4 11 to 64 deals in Q1 12, a relatively modest decline of 7%.

Three of the top 10 deals were in the beverage sector, including two in the top three largest transactions — Carlsberg's purchase of the remaining minorities in its Russian Baltika division and the merger of Embotelladora Andina with Embotelladoras Coca-Cola Polar in the Chilean soft drinks sector.

The value of deals in the beverage sector, however, declined more sharply, recording a total disclosed market value of US$2.5b in the quarter, a decrease of US$2.0b (45%) on the previous quarter.

Number and value of beverage deals Q2 09 to Q1 12


Number and value of beverage deals Q2 09 to Q1 12

Source: EY's Analysis of Thomson Reuters Data

Food

There were 206 food transactions in the first quarter, a decrease of 41 deals (17%) compared with Q4 11. As usual, the food sector accounted for the largest proportion of deal volumes, contributing approximately two-thirds of transaction activity, and provided the period's largest deal: the US$2.7b purchase by Kellogg of Procter & Gamble's Pringles snacks business.

Helped by this large transaction, total value in the food sector declined by less than overall total value. Food sector total disclosed deal value in Q1 12 was US$4.5b, a decrease of US$1.7b (27%) compared to the previous quarter.

Number and value of food deals Q2 09 to Q1 12


Number and value of food deals Q2 09 to Q1 122

Source: EY's Analysis of Thomson Reuters Data

Household and personal care

The number of deals in the household and personal care sector declined to 33 in Q1 12 from 52 in Q4 11, a reduction of 37% in activity.

The sector still contributed two deals to the top 10 largest transactions, but with relatively low disclosed values: the US$290m purchase of Everbeauty by Svenska Cellulosa AB and the US$118m purchase of a 70% stake in Ginza Stefany Cosmetics by LG Household & Healthcare. Total HPC disclosed transaction value fell by 88% from US$4.3b to US$0.5b.

Number and value of household and personal care deals Q2 09 to Q1 12


Number and value of household and personal care deals Q2 09 to Q1 12

Source: EY's Analysis of Thomson Reuters Data

Tobacco

In the highly consolidated tobacco sector, total deal volume decreased from 5 deals in Q4 11 to 2 deals in Q1 12 and there was no disclosed value given for either of those deals.

Number and value of tobacco deals Q2 09 to Q1 12


Number and value of tobacco deals Q2 09 to Q1 12

Source: EY's Analysis of Thomson Reuters Data



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