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 The consumer products industry has fared better than many other industries in the economic downturn. Yet large consumer products companies are frustrated by the lack of growth, and many smaller companies are concerned about larger firms leveraging their brand and relationships with the large retailers to take market share.
A key objective is global expansion, often beginning with a partnership, particularly in emerging markets such as India, China and Brazil. A number of larger consumer products firms are adapting an aggressive stance and seeking large merger and acquisition deals in emerging markets for their products, while others are pursuing smaller tuck-in acquisitions to shore up their market position. Merger and acquisition activity is alive once more in the consumer products industry.
Ultimately the trend we have seen for decades will continue: the big multi-national companies get bigger. At the same time, smaller firms are planning their own growth strategies using organic growth as the driver.
This means that smaller consumer products firms and international firms will need to be uniquely positioned to be acquired or to merge with others. It could also mean pursuing some unique business positioning that will allow them to maintain independence and still be able to sustain or grow market share.
Recent M&As have several interesting characteristics:
• The focus is strategic, not financial engineering.
• The strategic intent is on growing global market share and growing existing brands, along with acquiring new brands to access new consumer channels.
• Valuations are down due to reduced multipliers and two years of down earnings.
• M&A is less about reducing costs (this has been the focus of most organizations for the last two years) and more about growth in revenue.
• Funding is less from financial institutions and more from internal resources.
Tompkins International supports M&A activities via:
• Candidate identification and qualification, globally
• Investment feasibility
• Distribution assessment & strategy
• Competitive intelligence and SWOT
• Market assessment
• Commercial and supply chain due diligence before an acquisition
• First 100 days after M&A • Supply chain integration
• Achieving long-term supply chain excellence
• Sustaining ongoing market growth
More M&A Resources:
More on Mergers and Acquisitions
M&A in Asia Support and Strategy: Learn from the experts at Technomic Asia.
M&A Podcast Series:
Supply Chain Due Diligence and Mergers and Acquisitions: Click here for listening options and transcript
Four Keys to Success with Mergers and Acquisitions:
Click here for listening options and transcript
Creating Mergers and Acquisitions that Work and Meet Expectations: Click here for listening options and transcript
Blog posts:
Are You an M&A Sinner? Repent and Heed the Lessons Learned!
Private equity firms make supply chains the star when adding value to their porfolio companies.
A caution on mergers and acquisitions and how they affect companies and their supply chains.
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