Fewer Mergers in 2012
The Food Institute tracked the biggest mergers and acquisitions throughout the year: the sale of five retail banners by supermarket giant Supervalu and food processor Kellogg Company's purchase of Procter & Gamble's Pringles business, a brand that earns $1.5 billion in sales across more than 140 countries; Campbell Soup Company's Bolthouse Farms $1.55 billion deal; ConAgra Foods' $6.8 billion purchase of Ralcorp Holdings and more as reported in The Food Institute Report.
Food Company M&A Slowdown through Q2
Through the first two quarters of the year, the food industry was involved in 157 mergers and acquisitions, with the second half maintaining that pace to close with 301 in total. Despite the attention paid to noteworthy mergers and acquisitions of 2012, the decline in total deals, and specifically in investment firms and bank activity, indicates how temperate the environment was for M&A.
"Fiscal uncertainty and frustration with Washington politics created a hesitant approach to M&A among investment firms and private capital in 2012, as the market reacted strongly to news of breakthroughs or impasses in sequestration negotiations," stated Henry Mollman, a Food Institute industry analyst.
Investment firms and banks continued to play a reduced role in deals in the second half, and finished the year with 49 mergers finalized or left incomplete, or 27.9% fewer than in 2011.
The Food Institute found food processors experienced a similar year in 2012 as they did in 2011, with 83 total mergers last year. There were five more acquisitions last year compared with 2011, the third-straight year of increased acquisitions after 2009's low of 58. While fruit and vegetable processors recorded 11 acquisitions, an increase of eight over the prior year, meat processors were involved in only two, down from nine in 2011.