Consumer products deals quarterly:
Q4 14 and 2015 outlook
Deal making in the consumer products sector surged back to life in 2014.
Improved economic conditions coupled with strategic portfolio optimization were dominant themes underpinning this activity.
The environment facing global consumer products players will however, continue to be tough in 2015. Organic growth in developed markets remains challenging and realizing meaningful growth in certain emerging markets remains volatile.
Companies must decide the combination of brands, categories or businesses to be grown, fixed, exited or sustained to drive shareholder value.
The improving economic conditions in 2015 for US based companies will result in strong balance sheets. It will support more capital markets transaction activity in the sector. Additionally, this environment may also continue to attract activist shareholders and private equity funds to further target the sector to create value.
Total deal value increased by almost 80% to US$169b in 2014 from US$95b in 2013 and was supported by eight megadeals.
Deal volumes picked up modestly in the last quarter of the year, increasing by 20 deals or 7% to 314 deals. Overall, the trend in volumes remains relatively flat, centered on a quarterly total of about 300 transactions.
Shift toward the middle market suggests that deal volumes should recover as companies pursue bolt-on acquisitions. Companies are maintaining their appetite for megadeals as they address the challenges of portfolio optimization at the global level. We expect the higher level of total disclosed deal values to continue in 2015.