M&A: Outlook for Retail
As the global economy starts to show signs of emerging from the worst of the recession, are retailers likely to pursue any kind of M&A strategy?
An analysis of available data and KPMG insight suggests that there are some bargains to be had among distressed companies. The next couple of years should also provide opportunities for stronger retailers to use M&A to expand into new markets.
Summary points from the research undertaken and our knowledge of the industry reveal:
- The retail industry is suffering. Declining GDP growth and falling personal disposable income have hit retail sales
- Challenging trading conditions for retailers have led to a drop in M&A activity in the industry and most probably distressed deals will continue
- Action in emerging markets: The largest falls in deal value (85 and 80 percent) and number of deals (30 and 29 percent) were in the Americas as both a target and acquirer region, respectively. Central Asia/Asia Pacific experienced similar falls in deal value as both a target and acquirer as the Americas, although the number of deals fell by less (10 and seven percent, respectively).Deal value fell by a smaller amount (56 percent) in Europe and the Middle East as both target and acquirer region.
- Food, internet and catalog sectors well positioned:
- Food retail was the biggest subsector contributing to the total deal value and
- Internet and catalog retailers increased their share of the total deal value to 14.7 - Where next? Retailers will continue to face a very challenging environment
Lack of cash for acquisitions combined with economic protectionism in emerging economies will continue to pose a challenge for retailers seeking growth through acquisitions."
KPMG has produced this industry report by analyzing five years' worth of historical M&A data (by value and volume) and interviewing KPMG's Global Sector leads to provide an outlook perspective for M&A. This includes highlighting key regions and countries for activity, who the main buyers and sellers are, and what is happening within sub sectors as well as the sector as a whole.
For further information, please download our publication here.
Date: 12/03/2009 | Size: 1071,44kB
Contact
Jürg Meisterhans
Partner, Sector Head Consumer Goods & Retail, Switzerland
KPMG AG
Badenerstrasse 172
P.O. Box
8026 Zurich
+41 44 249 21 78 | jmeisterhans@kpmg.com
Contact
Patrik Kerler
Partner, Head Mergers & Acquisitions
KPMG AG
Badenerstrasse 172
P.O. Box
8026 Zurich
+41 44 249 33 20 | pkerler@kpmg.com
