Food Industry Merger Activity Rebounds In 2010

As 2010 comes to a close, The Food Institute is readying its annual report

As 2010 comes to a close, The Food Institute is readying its annual report on Food Industry Mergers & Acquisitions in the wake of a flurry of divestiture activity for the year’s end.  While the tallies for the year are not yet finalized, the Food Institute reports that already in 2010, total mergers and acquisitions for the year increased approximately 20% over the previous year. The 300 plus deals announced in 2010 was still well under 2008’s tally of 422, however but is an indication the the economy is on the mend. 

The Food Institute This information is gathered from the Merger and Acquisition column in its weekly Food Institute Report. The associationbeen tracking mergers and acquisitions in the food industry since 1928 and has published an annual report on the activity for over 30 years. The 2010 summary will be finalized in the next few weeks and will be available in February of 2011.

This significant gain from 2009 marks an upward tick in activity following 2009’s sharp decline largely that can be attributed to due to a lack of available financing and uncertainty on the part of both buyers and sellers.  But as confidence started to return to the market, as did available finding, and companies had more cash on hand as a result of holding still the prior year, activity turned upward. 

Indeed, investment firms increased their role as a result as well, closing 34 deals and announcing another 12 for a total of 46 – almost 15% of all the deals recorded by The Food Institute.
Food processors also stepped up the pace a bit, accounting for 75 deals thus far – almost a third more than a year earlier. One of the larger deals in this arena was in snack foods, with the merger of where Lance, Inc. and Snyders of Hanover, Inc. whose combined sales exceed $1.5 billion in as always, some firms purchased others to expand in theoir current markets or product lines, while others did so to diversify into new areas.

Although there were no big blockbuster deals on the retail side Giant’ Carlisle’s purchase of 25 Ukrop’s supermarkets helped lift that chain’s store count by over 15%. Meanwhile, Supervalu continues to shop the Shaw’s chain although nothing has been reported on that front.

In the fourth quarter of 2010 interestingly, The Food Institute tracked 64 mergers, actually a decline in activity from the 101 that were announced in the third quarter as it appears this surge in activity actually in the waning months of 2009’s. 

Comparing the first and second half of the year, the 152 total mergers from January to June was surpassed by July through December’s 165. By category, there were no extraordinary surges in the fourth quarter as the year-end totals followed activity trends across nearly all segments.

And what’s on tap for 2011? Well you will have to check the Food Institute Report to keep up on the latest.