Report: U.S. retail and consumer M&A value at five-year high in 2015

The year 2015 was a big one for mergers and acquisitions in the retail and consumer sectors, with 31 multibillion dollar deals driving activity during the year.



United States retail and consumer (R&C) total transaction value for 2015 hit a five-year high and surpassed the $100 billion mark for the third year in a row, according to PwC’s U.S. retail and consumer deals insights 2015 Year in Review and 2016 Outlook report.



The transaction value for announced deals greater than $50 million was $238 billion, up 23% from $194 billion in 2014, the report said.



In addition, the R&C sector in 2015 experienced the most megadeals (deals with a value of over $1 billion) in several years



Megadeals: The 31 R&C megadeals (deals with a value of over $1 billion) announced in 2015 were anchored by the food and beverage (including alcohol), grocery, drug, discount and mass sectors. The largest deal of the year was the H.J. Heinz Company and Kraft Foods Group, Inc. merger, which accounted for 22% of the total deal value for announced deals greater than $50 million.



IPO: IPOs in the retail and consumer sectors on average in 2015 outperformed most other sectors in the IPO market and the sector’s activity experienced only slightly slower numbers from 2014.



In 2015, the R&C sector saw 17 IPOs raise $4.3 billion, compared to 22 IPOs for $4.5 billion in value in 2014. This slight decrease contrasted the significant decline in the proceeds raised in the broader IPO market in 2015, which fell from $87 billion in 2014 to only $33 billion in 2015.



Private Equity: PE activity decreased in the retail sector, but increased in the consumer sector. For deals greater than $50 million, PE comprised 32% of retail deal volume and 25% of the retail deal value in 2015 compared to 52% and 57% in 2014, respectively.



Cross border activity: Cross border activity was lower than prior year levels, representing 40% of R&C deal volume and 26% of R&C deal value in 2015. Inbound deal activity was more prevalent in 2015, comprising 58% of cross border deal volume, and 80% of cross border deal value.