Consumer products deals quarterly, April - June 2011

Consumer products deal
activity overview

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Global consumer products corporate and private equity (PE) transactions scorecard by sub-sector


Deals announced Q2 11 Q1 11 Sequential change Q2 11 Q2 10 Year-on-year change
Corporate deals by subsector
Beverages 58 61 -5% 58 35 66%
Food 164 131 25% 164 147 12%
Household and personal care (HPC) 39 22 77% 39 26 50%
Tobacco 6 6 0% 6 1 500%
Total 267 220 21% 267 209 28%
 
PE deals by subsector (based on seller sector)
Beverages 7 6 17% 7 8 -13%
Food 41 23 78% 41 28 46%
HPC 8 1 700% 8 2 300%
Tobacco - - - - - -
Total 56 30 87% 56 38 47%
 
Total consumer products (CP) deals by subsector, corporate and PE
Beverages 65 67 -3% 65 43 51%
Food 205 154 33% 205 175 17%
HPC 47 23 104% 47 28 68%
Tobacco 6 6 0% 6 1 500%
Total 323 250 29% 323 247 31%


The number of deals by both corporate and private equity buyers increased in the quarter.

Conflicting forces have driven the level of consumer products M&A activity in the first half of the year.

On the one hand, the market-leading companies in our industry are in robust financial health and are certainly not lacking the appetite or firepower to do deals.

But on the other hand, it is remarkable how well the volume of deal activity has held up considering the backdrop of a European debt crisis and a political dogfight to avoid a US debt default.

We take a closer look at this quarter:

Data highlights Q2 11

Deal volumes increase: Deal volumes increased in Q2 11 rebounding from the first quarter's decline. The total number of deals increased by 29% to 323, rising in the food and household and personal care sectors, but falling slightly in beverage. Tobacco deal volume was static.

Total deal value and average deal size both drop: Total disclosed deal value decreased by 46% from $22.4b in Q1 11 to $12.1b in Q2 11. The average transaction value for disclosed deals decreased from $213m in Q1 11 to $104m in Q2 11.

No mega deals were concluded in the quarter: There were no mega deals (with a value > $5b) in the quarter. The largest deal was Lactalis's purchase of a further 54.3% of Parmalat for $3.5b. Adding in the prior purchase of a $1.1b stake in Q1 11 brings the total consideration close to the mega deal threshold.

Corporate deals dominate the top 10 deals: The number of deals by both corporate and private equity buyers increased in the quarter. Corporate deals represented 83% of total deals in Q2 11, a reduction of six percentage points from the previous quarter, but there were no private equity deals in the top 10.



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