The Deloitte Consumer Products M&A Survey: July 2012

Rising to the challenge


We are pleased to present our latest Consumer Products M&A survey – Rising to the challenge. This is the fourth biannual survey of CEOs, CFO and M&A directors of leading Consumer Products companies (publicly listed or private UK).

The report provides our insights from a macro-economic perspective and analysis of M&A activity across the key Consumer Products sub sectors from M&A data provided by 25 European Consumer Products companies. This report also gives our view of the M&A outlook, future profitability levels and actions to address the changing patterns in consumer behaviour.

Key findings

  • Our survey indicates that there has been a retrenchment in attitudes around the anticipated level of M&A over the next twelve months, with a third of participants now indicating a pessimistic view. However, it is also noteworthy that just under 30% of respondents were very optimistic about the outlook for M&A.
  • Despite ongoing market uncertainty in the Eurozone and the falling back of the UK and a number of other European economies into a technical recession in the first quarter of 2012, underlying M&A drivers in the Consumer Products sector remain strong.
  • For those companies who participated in the survey, market consolidation to achieve economies of scale was seen as one of the principal drivers for undertaking M&A, along with international expansion into high growth markets and distress driven deals.
  • Consumer Product companies continue to face the challenge of passing through price increases against a background of significant price-led retail competition.
  • In some sectors the ongoing pressure for greater economies of scale is likely to bring about greater consolidation.
  • In terms of obstacles to undertaking M&A, financing was not seen as one of the key restraints on current deal doing. Economic uncertainty, pricing expectation gaps and shareholder/director caution were all identified as key reasons.
  • In the 12 months to 31 May 2012, there were 23 deals with transaction values in excess of €500m. Flagship assets have continued to attract a valuation premium, but our survey indicated anecdotally that the pricing gap between buyer and seller may be closing slightly, particularly in the small and medium enterprise market.


The Deloitte Consumer Products M&A Survey – Rising to the challenge