Consumer sector M&A deal value declines by 50 per cent YoY to USD138bn

The number and value of merger and acquisition (M&A) deals announced in the consumer sector since the start of the year has declined significantly, according to research by Stock Apps.

The number of M&A deals in the global consumer sector dropped from 2,922 to 2,244 in the first nine months of 2020. Deal value also dropped by 50.3 per cent during the period, going from $278 billion to $138 billion.

Overall M&A activity in APAC has, however, shown resilience during the pandemic. Some sectors in its economy actually experienced growth during Q1 to Q3 2020. These are the telecommunication (19 per cent) life sciences (9 per cent) and utilities (9 per cent) industries.

A report from Global Data reveals that Goldman Sachs took the lead in consumer M&A deal activity, advising on 23 deals worth $21.1 billion from Q1 to Q3 2020. PwC led in deal volume, advising on 25 deals worth $3.5 billion.

During H1 2020, deal value in APAC decreased by 17 per cent compared according to Mergemarkets. Comparatively, it declined by 31 per cent in Europe and 72 per cent in the US during the same period.

Similarly, deal volume in the first nine months of 2020 dropped 8 per cent in APAC. In contrast, the US saw a 20 per cent drop while EMEA declined by 15 per cent.

However, for the APAC region as a whole, high-value deals reached $392 billion in Q3 2020, the highest figure on record for any third quarter. In Q3 2020, China topped deal activity in APAC with a 29.5 per cent share of total deal volume. Japan was second with a 15.9 per cent share and India took the third spot with 15.7 per cent. China had a 44.2 per cent share of total deal value during the quarter, followed by Japan at 25.9 per cent.

On a global scale, the pandemic slowed down M&A activity significantly, with the April deal volume being 80 per cent lower than in December 2019. As of mid-September, there had only been 15 mega deals, compared to 27 during the same period in 2019.