Food and Grocery Mergers on the Rise

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A recent survey predicts that 2014 will see more mergers in the grocery and food sector. In all

industries, the large corporations are snooping around and buying smaller firms to strengthen their businesses and achieve their goals. There are so many recent transactions that depict just this very trend.

The dealmakers are showing an increased interest in restaurants. In the past year, the bigger deals were supported by private equity, but today private equity firms are investing in all sorts of deals. Their attention is not only focused on major enterprises, they are also considering the middle market sector.

Restaurants are not the only sector that has aroused interest; the same can be said for other retail sectors as well. In the past few months, there has been a lot of activity in the grocery industry and corporate clients have stepped into the market. In the past, retailers played a different strategy. Today, they are all trying to step up their game so that they can compete in the market. Technology has advanced, and until retailers make use of this, they will be left behind in the race. This is why many acquisitions have been made in the distribution and technology channels on the ecommerce side. In the time to come, more such acquisitions will be seen because this is the fastest way that retail companies can grow or so claim the industry experts.

As far as the consumer side is concerned, M&A activity is expected to take place in the food industry as well, which has always been a strong sector in terms of activity levels. The industry experts believe that large corporations will acquire smaller firms. Private equity firms will also focus on them and help them in building a brand image.

Before a company makes any acquisitions it must identify its competitive strengths and get rid of assets that are no longer required. While conducting deals, this principle will be followed and widely applied on both the retail and the consumer side.

Another report told the press that acquisitions have taken place in the past as well, but quality often got compromised in the process. If this trend continues this year, the acquisitions will likely fail because competition levels are too high.

Let’s wait and see how many of these predictions turn out to be right.

Source: www.digital.themiddlemarket.com

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