Food Industry M&A Activity Soars in First Quarter of 2014

The latest from The Food Institute.

Mergers and acquisitions in the food industry more than doubled in the first quarter of 2014 compared with the same period the previous year. FOOD INSTITUTE  research shows that in the first three months of 2014 there have been 138 deals, while in 2013 there were only 58. This 138% increase could mean a big year for M&A activity, possibly becoming the most active in five years.

Retailers saw a 186% increase from 2013, the largest increase out of all categories recorded. The most notable merger among retailers was SAFEWAY INC. agreeing to be acquired by CEREBUS CAPITAL MANAGEMENT, owner of ALBERTSONS. The deal is worth about $7.64 billion in cash, and pending other transactions could top $9 billion. The merger would create a combined network of over 2,400 stores, 27 distribution facilities and 20 manufacturing plants. And, according an SEC filing, a major supermarket chain, which at least one Wall Street analysts suggested was Kroger, was eyeing the chain but decided not to proceed with an offer. 

Food processors also saw a surge of activity this quarter, rising 173% in 2014 from the previous year, with a total of 41 deals in the first quarter alone. Foodservice and investment firms were not far behind, doubling and more than doubling their number of transactions compared with 2013, respectively. 

The number of mergers and acquisitions was almost unchanged from 2012 to 2013, but it looks as if that trend will not continue in 2014. Activity in the first quarter has already surpassed the total recorded for the first half of 2013 by 17 deals, and if this pattern extends into the rest of the year it will be a banner year for M&A in the food industry.

The Food Institute Merger and Acquisition database is a great industry resource and available at www.foodinstitute.com