Global consumer mergers and acquisitions (M&A) had a combined transaction value of $202.5 billion in the first half (H1) of 2015, according to research from Mergermarket. The value represents a 42.8% increase over H1 2014 totals.
Of the consumer subsectors involved, retail ($105 billion) and food ($80.2 billion) experienced a year-over-year increase in transactions of 129.9% and 106.9%, respectively. The overall boost in retail deal value represents the highest on record. Meanwhile, food transactions received their highest value since 2007.
The report, titled: Global Consumer Trend Report: H1 2015, includes data based on consumer industry transactions of more than $5 million. Deals with undisclosed values are included where the target’s turnover exceeds $10 million.
Overall domestic M&A leapt to $143.3 billion in H1 2015, marking a 133.2% increase from the first half of 2014 ($61.4 billion). Domestic transactions accounted for 70.8% of deal value within the sector, with the U.S. leading the way. In fact, U.S. companies accounted for $79 billion worth of deals, up 29.7% in value compared to H1 2014.
However, total cross-border transactions dipped 26.3% to $59.2 billion. Mergermarket attributed this decrease to the appreciation of the U.S. dollar and ensuing increased borrowing costs. U.S. inbound M&A dropped drastically to $407 million during the first half of this year, a 98.2% decrease compared to the same period in 2014.
Due to a weakened Euro, Europe has not been able to keep up with rising costs. As a result, total outbound transactions into the U.S. dropped from 23 deals worth $2.6 billion to only 14 deals worth $49 million. On the other hand, U.S. outbound activity has reaped the benefits of the rising dollar in H1 2015, seeing an uptick of 69.6% in value from the prior year.
Domestic activity will continue to drive activity moving into H2 2015, particularly in thriving M&A markets such as the U.S. and Asia, the report concludes. Inbound activity into the U.S., particularly from Europe, will continue at a low level due to the strong U.S. dollar, as well as the expectation of rising interest rates.