Number of retail M&A deals soars as buyers eye economic recovery
The number of M&A deals targeting UK retailers has swelled 28 per cent to 37 in the past year, new analysis has found.
City law firm RPC found that the number of deals rose from 29 in the previous year while the Morrisons and Asda deals saw deal value skyrocket.
Value has soared more than 40 times from £416m to more than £17bn in the last year, thanks to the takeovers for the two supermarkets.
M&A in the retail sector has been driven by the continued growth of e-commerce, private equity backed deals and takeovers of fast-growth affordable luxury brands.
Head of corporate at RPC, Karen Hendy, said: “The retail M&A landscape has transformed completely in the last nine months from being purchases of distressed assets to competitive bidding in a sector that is clearly bouncing back.
M&A can help retailers “to rapidly expand categories or channels or open up access to new geographies,” Hendy added.
Big name deals in recent months have included the acquisition of online beauty brand Cult Beauty by e-commerce giant The Hut Group.
Drinks maker Pernod Ricard also bought the online spirits seller Whisky Exchange while online sportswear firm Sweaty Betty was purchased by US footwear brand Wolverine.
Companies are anticipating the full revival of the economy post-pandemic and hope shoppers will use the savings they built over lockdown on retail.
Hendy added: “UK retailers are attracting interest from several fronts, from established high-street giants, newer online retailers and private equity funds.
“They see an opportunity in buying businesses that have built up strong brand presence that will complement or enhance what they can offer the consumer.”