Significant increase in deal volume and activity in Food & Beverage M&A
In 2024, the Food & Beverage M&A market experienced a significant uptick in deal volume and activity. The total number of deals reached 151, a 29.1% increase from the previous year’s 117 deals. Even without the exceptional acquisition of Britvic by Carlsberg, the total deal value saw a robust rise of approximately 31.0%, hitting an estimated £2,700.0m in 2024 compared to around £2,100.0m in 2023.
During the third tertial of the year “T3” in 2024, there was an increase in the volume of deals, with 59 transactions compared to the same period in the previous year, marking a 25.5% increase. A notable shift was observed in deal values, with 68.9% of deals estimated to be £10.0m or less, down from 75.0% in 2023. Additionally, only 9.0% of transactions exceeded the £50.0m mark in 2024, falling below the five-year average of approximately 14.0%.
Overseas buyers played a lesser role in the 2024 M&A activity, accounting for only 21.9% of deal volume, lower than the proportion of deals in 2023 and the historic five-year average. Financial buyers also saw a decline in their involvement, comprising 12.6% of the deal volume in 2024, down from 18.8% in 2023 and below the five-year average.
Within the sector categories, distribution stood out as the most active, representing 23.2% of deal volume in 2024. The beverages sector not only accounted for a significant portion of deal volumes (20.5%) but also of deal values. Notable transactions included Carlsberg’s acquisition of Britvic and the acquisition of Marston’s stake in Carlsberg Marston’s Brewing Company. Grocery/Confectionery deals remained consistently high at 22.5% demonstrating ongoing activity in this category.
Mark Lynch, Partner at Oghma Partners, noted the challenges faced in 2024 attributed to geopolitical and economic uncertainty impacting M&A activity and valuations. The new Labour government grappled with persistent inflationary pressures and stagnant economic growth. The high cost of debt limited companies’ ability to raise affordable financing for acquisitions, leading to reduced competition for assets and subsequent pressure on valuations. The surge in M&A activity during the second half of 2024 was influenced by October’s Budget announcement, triggering a rush to close deals before anticipated tax increases.
Looking ahead to 2025, Lynch emphasized the intensified competition expected in the plant-based and meat-free market, highlighting the importance of strong management, solid brand positioning, and meeting consumer demand for health-conscious products. The food ingredients sector continues to be attractive for M&A due to its diverse end markets and high margins, while the Pet Nutrition sector shows potential for further consolidation as consumers seek natural and high-quality products for their pets.
