M&A total deal volumes for the food and drink industry rose by 29.1% to 151 deals from 117 in 2023, with overall deal value growing by approximately 31% to £2.7bn, up from £2.1bn.
These figures from corporate finance firm Oghma Partner’s yearly report excludes Carlsberg’s recent £4.1bn Britvic acquisition, with smaller deals dominating the market, although the 68.9% valued at £10m or less figure is down from 75% in 2023. Meanwhile, only 9% of deals exceeded £50m, well below the five-year average of 14%.
Read more: Carlsberg completes Britvic merger
Mark Lynch, partner at Oghma Partners, said: “2024 was marked by geopolitical and economic uncertainty, which has impacted M&A activity and company valuations. The new Labour government has grappled with persistent inflationary pressures and stagnant economic growth, while global tensions – such as conflicts in Europe and the Middle East – added further complexity. One of the biggest challenges to valuations has been high interest rates, which were initially expected to decline in early 2024 but have remained elevated.”
“Companies with strong supply chains and exposure to high-margin markets are key targets. Despite pent-up demand from private equity, current activity favours value driven opportunities over large-scale deals. While larger deals may take time to return, buyer interest is there, with many preparing to deploy capital as the right opportunities emerge,” he added.
