Pending EU exit fails to slow industry deals
That’s according to Oghma Partners’ latest report on M&A agreements in the sector. There had been 86 deals with officially confirmed values in the past year, versus 81 in 2017, the paper stated.
However, it speculated that a no-deal Brexit could ultimately cause buyers and sellers to back off from deals for a time. “Indeed, as we enter the first quarter of 2019, there is some anecdotal evidence of sellers holding off.”
Even without a no-deal scenario, the pace of M&A could fizzle out, the report claimed. “Looking into 2019, it’s possible that we could see a repeat of 2017, where the impact of the Brexit referendum vote took some months to impact the level of deal activity, but ultimately led to a 28% decline in activity compared with 2016.”
Overseas investors
The total value of last year’s transactions was at its lowest level since 2011, down from £4bn to £2.6bn, but the number valued at over £100m reached its highest level since 2015, Oghma Partners added. Investment from overseas investors accounted for 37.2% of total deal volume for 2018, a proportion that was slightly down on the previous year.
The single most significant transaction was Luigi Lavazza’s takeover of Mars Drinks UK for £499m, which was announced on 1 October, according to Oghma Partners.
Other confirmed triple-figure deals noted by the company Included: Nomad Foods’ £210m acquisition of Aunt Bessie’s – made public on 4 June; Archer Daniels Midlands’ £185m purchase of Probiotics International – revealed on 29 June; and Valeo Foods’ £100m acquisition of Tangerine Confectionery – announced on 11 August.
The report also mentioned Agrial’s acquisition of cider producer Aston Manor, which was rumoured to be worth £100m, although the value remains officially unconfirmed.
