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The M&A of Food & Beverage suffers little from Covid

Accordinng to Pwc, + 36.3% value of operations in 2020, + 207% Italy

Mergers and acquisitions in the Food & Beverage sector suffered little from the effects of the Covid-19 pandemic. According to an analysis carried out by Pwc, in 2020 the sector recorded, globally, an increase of + 36.3% - to 110 billion dollars - in the value of operations, compared to a reduction of 9.6% in terms of number of deals compared to 2019. Supporting the value were some transactions carried out by industry giants globally including Coca Cola ($ 5.7 billion), Nestlé (1.5 billion) and Bellis (8, 8 billion). There was also a growth in value in Italy. Against a -29.8% volume, there was a 207% increase in transaction value (approximately $ 1 billion), reflecting three major deals announced (and closed) in the fourth quarter of 2020. In in particular, these are Ferrero/Fox's biscuits (300 million dollars), Rhone / Illycaffe '(200 million) and the acquisition of the majority of the Canadian brand Catelli Foods by Barilla (100 million).

The most attractive sub-segments were Food (especially pasta, ready-to-eat and frozen foods), Beverage (especially coffee and milk) and Wine, both globally and in Italy. In the first quarter of 2021, the volume of M&A continues to be significant, despite being characterized by a smaller size.

"The Food & Beverage sector is one of the flagships of Made in Italy. In terms of number of operations, the sector has certainly been impacted by the pandemic, especially as regards catering and Food Service, but to a lesser extent compared to others, demonstrating its resilience compared to other segments", commented Elena Borghi, Partner Deals Food & Beverage of Pwc. Furthermore, from the Pwc analysis, it emerges that, looking at the type of investor, while at a global level the operations led by strategic investors continue to represent about 75% of those announced (in line with 2019), in the Italian market the Private Equity funds have an increasing weight, being the protagonists for about 40% of the operations; confirming the interest of financial entities in this sector, especially in support of supply chain integration operations and diversification of the product portfolio but also of the development of Italian and foreign brands.

In detail, globally, there were 2,328 transactions in 2020, down by 2.9% on 2019 in terms of volumes: 1,761 with sector operators (-12.1%) and 567 by private equity funds (-0.5%). In Italy, there were 73 transactions (-10.8%): 43 by sector operators (-37.7%) and 30 by private equity funds (-14.3%). "We expect M&A operations in Food & Beverage to be an accelerator of the business transformation process and go in two directions: on the one hand, they will drive the development of the downstream supply chain, towards multi-channel business models, and in this sense the Ho .Re.Ca. Could catalyze numerous investment opportunities; on the other hand, they will guide the consolidation of the upstream supply chain, and the Private Label companies serving large-scale distribution could represent interesting targets for both Corporate and private equity operators", Borghi added.

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EFA News - European Food Agency