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M&As in the food industry

Nine business deals for acquisitions in the food and beverages and organized food retail sectors have already been sealed in just four months in 2023, an indication of the momentum these sectors maintain in the Greek economy.

The energy/inflationary crisis does not seem to have dampened investors’ appetite for mergers and acquisitions, while in some cases it has even accelerated developments, as the drop in demand made certain companies more vulnerable, leading them into the embrace of bigger players.

Next month’s elections are not expected to hamper investment appetite: on the one hand because even in the event of a government not being quickly formed, the economy is in a clearly better condition than during the period of the 10-year economic crisis; on the other because the production sectors and food retail, despite any losses from domestic demand, are still characterized by demand inflexibility.

The continued rise in tourism, moreover, is creating new needs, offsetting the losses from any reduction in consumption by Greek households. It is no coincidence that several of the business deals closed in 2023 are largely related to the strong tourism flow, such as the deals related to the bottled water and soft drinks sector, as well as those related to the network expansion of supermarket chains in popular destinations.

At the same time, more and more Greek companies are strengthening their export-oriented character not only through exports, but by acquiring production and commercial activity outside the Greek borders.

What’s next? Takeovers and mergers in the dairy sector (where major companies aspire to become wider food groups), continued takeovers of mainly local supermarket chains by larger ones, and strong activity also appears to exist in the frozen pastry category.

It is recalled that in 2022, according to a PwC study on M&As, 22.9% of the value of all these transactions came from the food and beverages sector. The fact that four of the six restructuring deals with a change of ownership completed in 2022 were in the food and beverages sector suggests that second or even third chances are often worthwhile at businesses in the sector.

Source: ekathimerini