Consumer Consolidation

customer consolidation

The consumer goods industry is facing further consolidation. Outline: Overview: Consumers consolidation pushes ahead with top-end deals for the future The consumer goods industry achieved the highest half-year value on the Mergermarket after a large number of major deals and with the $13.5 billion deal between Amazon and the high-end food retailer Whole Foods, which recently hit the news. Consumers were also the most value driven sectors in this timeframe, with 222 transactions valued at USD 132.9 billion, followed by sectors such as power, coal and gas, pharmaceuticals, medicine and biotechnology.

Consumer goods activities were driven by a number of large catering and grocery deals, among them Reckitt Benckiser's $17.8 billion February deal to acquire Mead Johnson & Company, a manufacturer of infant foods; JAB Holdings' April $7.4 billion takeover of Panera Bread Company, a baked goods company; and Tyson Foods' $4.1 billion April deal to acquire AdvancePierre Foods, a provider of sandwiches and cakes.

Acquiring a US$60.7 billion controlling interest in Reynolds American by B.American US tobacco was the most highly rated US transaction across all industries. With all these transactions, the acquiring firms used M&A to solidify in a highly competitive industry and to enter new market segments in order to achieve further expansion. Non-technology firms, when the industries merge, recognize that they are losing clients to technology firms that interfere in their own spaces if they are not aware of the technology-based possibilities.

In the first half of 2017 (527), the largest number of transactions were made in the technologies, utilities and telecoms industries, but in the reporting quarter the transaction value was only 69.4 billion US dollars - a decrease of 26 per cent compared to the previous year's value of 94 billion US dollars. In spite of the decline in value, today's technologies are an important driving force for dealing in all industries, as industry converges with non-industry converging, it becomes hard to categorise what is and is not a technological transaction.

Amazon's recent acquisition of Whole Foods marks this move, as a technological company moves into previously unexplored territories to grow. "Bringing the industries together, non-technology firms recognize that they are losing clients to technological firms that invade their spaces unless they keep up-to-date with technology-based opportunities," says White & Case Partners Bill Choe.

"that the best way to acquire businesses to embed tech firms is to view tech as a way of living, not as a distinct "digital division" of the business."

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