Overview of merger and acquisition activity in the UK in 2012
Here is a summary of M&A activity in the UK Food and Drink sector for 2012. A full report is available from Oghma Partners.

2012 witnessed a further recovery in UK Food & Beverage M&A deal volume with a 20% increase over 2011 to an estimated 87 deals; this total compares with only 64 deals in 2010 and is the highest volume of transactions in five years, though still some way off the 114 transactions we tracked in 2007.

The increased volume of deals is also reflected in the value of deals with total deal value estimated at circa £4.3bn. Even treating the £1.2bn China Bright/Weetabix deal as a one off, deal value was up almost 50% over the figure for 2011.

Key transactions, aside from Weetabix, included Muller’s acquisition of Robert Wiseman, the merger of Britvic with AG Barr, the acquisition of United Biscuits snack division by Intersnack and Hain Daniels acquisition of Premier Foods spreads and jellies business. Overseas buyers accounted for close to 30% of deal activity by volume which is within the range of activity that we have seen in the past, however by value overseas buyers, or UK subsidiaries of overseas companies, accounted for over 60% of deal value.

The UK sector clearly remains an attractive market for inward investment, given its relatively open nature, the existence of scale branded businesses and the ownership structure of many of the companies. Arguably if the industry bias was more towards private ownership the level of deal activity would perhaps be lower.

Private Equity/Financial buyers accounted for 16% of buyer activity in the period – little different from 2011.
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