In the perfect food industry merger and acquisition (M&A) deal, both parties come out ahead. Last year saw several examples of both buyers and sellers in the food industry walking away with something to position them for more stable, sustainable growth. But which countries had the most food industry M&A deals in 2021?
US Leads Food Industry M&A Deals
New figures released by data analytics and consulting company, GlobalData, shed light on the top locations for food industry M&A deals in the fourth quarter of 2021. Perhaps unsurprisingly, the data shows that M&A activity is strongest in the US, which saw a total of 15 deals announced in the Q4 of 2021, up from seven deals announced in the previous three-month period to the end of September.
Second to the US was the UK with eight deals in the final quarter of 2021 (up from three in Q3 of 2021). Notable transactions included the move by French poultry group LDC to enter the UK with the acquisition of Wales-based peer Capestone Organic Poultry. Meat processor Cranswick also bought two local suppliers of Mediterranean food, expanding its portfolio to include non-meat brands.
Recent months have also seen an uptick in food industry M&A deals in China. The country has seen nine deals announced over the last two complete quarters, up from an average of four deals every six months between 2019 and 2021. India and Japan round out the top five countries, completing four and three M&A deals, respectively, in the final quarter of 2021.
Globally, 74 food industry M&A deals were announced in Q4 of 2021, up from 73 in the third quarter and from an average of 58 deals per quarter over the previous three years.
Top US M&A Deals of 2021
In one of the first food industry M&A deals of 2021, food giant Mondelez acquired Hu, a fast-growing premium chocolate company, for an undisclosed amount. The company successfully acquired 100 percent ownership of Hu and the acquisition closed on January 4, 2021.
A few months later in March, Nestlé finalized the acquisition of premium beverage brand Essentia Water, the leading alkaline water brand and top selling bottled water in the natural channel, for an undisclosed amount. The transaction followed Nestlé’s sale of its North American water business — including Poland Spring, Pure Life, Deer Park and other brands — to two private equity firms for $4.3 billion.
In June 2021, Kraft Heinz announced the sale of its nut business to fellow food giant Hormel Foods for $3.35 billion. The deal included most products sold under the Planters brand, as well as Cheez Balls, Cheez Curls and Corn Nuts branded products. The purchase was a smart move for Hormel since the Planters nut portfolio brought in approximately $1 billion in sales to Kraft Heinz in 2020.
Later in June, The Hershey Company acquired the better-for-you chocolate brand Lily’s Sweets for $425 million. The confectionary giant entered an agreement to purchase Lily’s Sweets the previous month after the company announced it would be selling its chocolate business in March. The move came as a part of a wider strategy for Hershey to offer healthier options.
In one of the most notable beverage industry M&A deals of 2021, PepsiCo announced it would be selling Tropicana, Naked and other North American juice brands to private equity firm PAI Partners in a $3.3 billion deal. The beverage giant kept a 39 percent non-controlling stake in the joint venture with PAI, meaning it held a minority ownership with no control over decisions.