The year 2017 was a record one for mergers and acquisitions in the Italian Retail & Consumer sector, with a total of 178 transactions taking place, according to a report by PwC.
Of the deals, 91 were domestic, 58 were undertaken by foreign operators on Italian targets and 29 by Italian operators on foreign targets.
With regard to the 178 operations announced in 2017, some 57 were carried out in the Food sector, 23 in the Beverage sector, 11 in the Personal Care & Cosmetics sector, 34 in Fashion & Luxury, 18 in the Furniture & Design sector and 35 in the Specialty Retailers & Leisure sector.
Major Deals
The most significant deals include the merger of Luxottica with France’s Essilor; the US acquisitions of Fannie May Confections and Ferrara Candy by Ferrero; and various foreign acquisitions by Lavazza, Campari and Zanetti. Of the transactions, 70% (124) were undertaken by industrial investors, while the remaining 30% were from financial investors.
Food was the most attractive sector for investors, accounting for 57 deals. Of this number, 32 were domestic operations, 17 inbound deals involving foreign companies or private equity funds, and eight were outbound deals, with Italian groups expanding in Europe and the US.
The two largest M&A operations in Italy made by foreign buyers were the acquisition of Irca, a company that produces bakery and confectionery items (€520 million) by US fund Carlyle Group, and the acquisition of balsamic vinegar producer Acetum (€350 million) by Associated British Foods.
'The significant number of inbound transactions (17) reflects the interest in the quality of ‘Made in Italy’ products,' PwC said in its report.
'Indeed the two most relevant deals of the Food segment were closed by international players: the acquisition of Irca, a provider of ingredients and base food products for pastry making, baking and ice-cream retailing (€520 million deal value) by the US-based Private Equity firm Carlyle, and the acquisition of Acetum, an Italian company producing balsamic vinegar by the listed UK-based Group Associated British Foods (€350m deal value).'
Other large players that strengthened their global presence were Parmalat, Granarolo and Ferrero.
There were five deals in the growing Organic and Health segment, including the acquisition of Diete-tic by Valsoia and of Nutrilinea by White Bridge Investments.
Nestlé Divestment
As part of its focus on core strategic activities, Nestlè divested certain assets (Italian frozen brands La Valle degli Orti, Mare fresco, Surgela to Germany-based Frosta, and the sale of a Buitoni fresh pasta and sauces plant to Pastificio Rana).
In the Food Retail sector, the most relevant deals were the buy-back of the minority stake in Supermercati Il Gigante by Panizza family and the takeover of retail chain DI.MAR. (Sapore di Mare brand), specialised in frozen fish, by private equity firm Edmond de Rothschild.
For 2018, PwC expects significant dynamism in the Food & Beverage sector, stimulated by consolidation needs on the Italian market and acquisitions abroad.
For example, in January, Ferrero announced the $2.8 billion acquisition of Nestlè US confectionary business, while Idea Taste of Italy announced a minority investment in winery Casa Vinicola Botter.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
