F&B M&A value in the MENA region hits record high
Mergermarket, the leading provider of M&A data and intelligence, has reported that Food & Beverage sector deal value for the full year 2016 surged to over US$ 3.4 billion (AED 12.4 billion) from just US$ 402 million (AED 1.5 billion) the previous year.
Total deal value for the year was the highest since the data provider first reported on the sector’s M&A landscape in 2009. Four deals in the Consumer sector have been announced so far this year worth US$ 104 million (AED 380 million)with a strong pipeline predicted for 2017. The data was announced at Mergermarket’s MENA Mergers 2017 forum, which took place at Jumeirah Emirates Towers in Dubai on May 8.
Deal value in the Food & Beverage sub sector so far this year has been driven by consumer giant, Nestlé’s, acquisition of Caravan Marketing Company, a leading Egyptian instant coffee company and owner of the Bonjorno brand, for US$ 33 million (AED 120 million). The acquisition reflects Nestlé’s ambition to invest in Egypt and the fast development of a rapidly growing soluble coffee segment which has been gaining popularity in the region.
Another headline hitting deal to watch is Brazilian meat producer, BRF’s, sale of a stake in its halal food unit, One Foods, which could be worth an estimated US$ 5 million (AED 18.3 million). Interest in the asset dropped following Brazilian police reports revealed a criminal investigation of the country’s meat industry. The stake may be targeted by Saudi Agricultural & Livestock Investment and the sovereign wealth funds, Abu Dhabi Investment Authority and Qatar Investment Authority.
Mergermarket MENA head Ruth McKee Al Ghamdi said in a statement: “Food and beverage continues to be a hot sector for M&A in the MENA region. In an era of low oil prices, challenging economic conditions and stiff competition, thriving businesses are highly sought-after by corporates and private equity firms. A number of successful concepts are expanding throughout the region through opening company-owned locations or franchising. Most deals in this space will likely be seen in UAE, Saudi Arabia and Egypt.”