It revealed that the number of ‘mega deals’ worth more than £1bn announced last year reached 39, compared with 34 in 2011. The total value of the transactions reached £128bn.
The researchers identified food and beverage manufacturing as one of the most active sectors – accounting for 15.4% of transactions.
A key deal in the sector was Diageo’s £1.3bn purchase of a stake in Indian drinks firm United Spirits in the fourth quarter.
Another mega deal was the completion of Chinese conglomerate Bright Food Group’s acquisition of iconic British brand Weetabix for £1.2bn in November.
In the same month, soft drinks giant Britivic and Irn-Bru confirmed plans for £1.5bn merger to create "a world-class soft drinks company".
After food and beverage, the next most active sectors were chemical manufacturing, which accounted for 12.8% of deals, and professional and business services, which represented 10.3% of M&A activity.
Food and drink manufacturing sector
Wendy Driver, Experian’s business development manager, told FoodManufacture.co.uk: “Historic deals for the food and drink manufacturing sector show that 2012 M&A activity was at its highest volume since 2007. There has been particularly high levels of cross border activity driving deal volumes and the majority of transactions are trade buying trade, with private equity being relatively subdued.”
Overall, there was a 15% rise in the number of very large transactions of more than £1bn. While the total number of deals fell last year, the value of deals increased compared with 2011. M&A activity in the mid-market range − deals worth between £10M and £100M − was the worst affected, with number of deals down by 6.2% year-on-year.
But the number of small deals – valued at £0.5M to £10M – and large deals – £100m to £1bn – remained relatively static.
Regional analysis revealed three hot spots for M&A activity with deal volumes in Northern Ireland rising by 36.8%.
Volumes in Scotland were up by 10.5% and in the South West of England by 7.3%.
Outside the food and drink manufacturing sector, leading deals included the £5bn acquisition of NDS Group – a Middlesex pay TV software firm – by California-based Cisco Systems and the £4.6bn investment of Nottingham-based retail chemist group Alliance Boots by US drugstore chain, Walgreen.
“Despite the challenges faced by the Eurozone crisis, the UK has proveD to be one of the most attractive markets in what has been a subdued year for mergers and acquisitions globally," said Driver.
“The quality of UK businesses and assets, as well as favourable interest rates, has been consistently attractive to overseas investors, which is helping to keep mergers and acquisitions activity buoyant and may serve to boost confidence further.”
Food Manufacture’s Business Leaders’ Forum
Meanwhile, M&A among food and drink manufacturers will be firmly on the agenda at Food Manufacture’s Business Leaders’ Forum , which takes place on January 15 at the offices of host sponsor legal firm Stephenson Harwood in London.
The event will be chaired by Paul Wilkinson, who has a distinguished record over many years on the Boards of various well-known UK food companies. Wilkinson is also the chairman of the National Skills Academy for Food and Drink.
The Forum will start by reviewing the events of the past year and hearing about the important issues that influenced performance of the delegates’ businesses. This will provide the starting point for looking forward at what the industry is facing and finally to come to a view on the degree of optimism regarding the outlook for food and drink manufacturers.
As well as the general economy and political landscape, the Business Leaders’ Forum will also discuss trading relationships and changing consumer behaviour.
Other topics will include investment in the sector; employment and skills issues; the impact of new regulations and prospects for the sector’s future sustainability.
Food Manufacture’s Business Leaders’ Forum is open to senior executives working in the UK food and drink manufacturing sector. Places at the event are free, but by invitation only.
If you would like to attend, please email the editor of Food Manufacture, Rick Pendrous at: firstname.lastname@example.org