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Consumer and Retail M&A Executive Report 2017

O� to New Peaks in Uncertain Times

Riding the wake of 2016’s near record-breaking growth, consumer and retail M&A in 2017 will yield a similar level of deal-making.

Consumer and Retail M&A Executive Report 2017

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In 2016, consumer and retail M&A reached post-recession highs, fueled largely by megadeals—consolidations valued at more than $1 billion.

Consumer and Retail M&A Executive Report 2017

Sources: Dealogic 1/1/2000 to 12/31/2016; A.T. Kearney analysis

20102009200820072006

21%

(20%)

7%

78%

(3%)

8%

(22%)

(70%)

11%

50%

(1%)

2%

(6%)

5%

(9%)

28%

(2%)

(8%)

(12%)

22%

9%

31%

2011 2012 2013 2014 2015YOY growth

M&A deal volume

M&A deal value

2016

$231 $237 $249$318 $294

$358

$469+12%

$154

$512$474

$267

Consumer and retail M&A activity level (US$ billion)

+31%

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Meanwhile, deal multiples dropped from 2015.

Consumer and Retail M&A Executive Report 2017

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As a result of these market factors, financial buyers were sidelined, giving way to strategic acquirers with strong balance sheets and synergy with target companies.

Consumer and Retail M&A Executive Report 2017

Sources: Dealogic 1/1/2000 to 12/31/2016; A.T. Kearney analysis

20102005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2016

Financial StrategicM&A deal share by buyer type

80%56% 54%

70% 74% 68% 57% 70% 76% 78% 84%51%

20% 30% 26% 32% 43% 30% 24% 16%22%46%49%44%

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2017 is set to mirror 2016 in its primary drivers of M&A:• More growth in consumer

and retail M&A• Importance of consolidation• Steady or increasing capital

access and balance sheet strength

Consumer and Retail M&A Executive Report 2017

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Several new factors have complicated this year’s M&A market:• Potential return to

sky-high multiples• Political uncertainty and

rising nationalism• More pressure on consumer

companies

Consumer and Retail M&A Executive Report 2017

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Tracking last year’s trends and forecasting tomorrow’s challenges, A.T. Kearney o�ers three insights for navigating the emerging consumer and retail M&A market.

Consumer and Retail M&A Executive Report 2017

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1. Value at the Extremes:Mega and Small M&A DealsThe market will see megadeals driven by consolidation, small deals focused on new growth and innovation, and a vanishing middle market.

Consumer and Retail M&A Executive Report 2017

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2. Increased Activity from Private Equity and other Financial BuyersMotivated by slashed costs and a new, synergistic focus, financial buyers will step back into action.

Consumer and Retail M&A Executive Report 2017

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3. Growth across MarketsInternational political uncertainty will lead to a focus on domestic M&A, and high-value deals will come to all markets and geographies.

Consumer and Retail M&A Executive Report 2017

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Consumer and Retail M&A Executive Report 2017

A.T. Kearney is a leading global management consulting firm with o�ices in 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.

Interested in learning more about 2017’s consumer and retail M&A forecast?

Learn more at www.atkearney.com/consumer-products-retail/cirp-ma-executive-report

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