By Rob Starr, Content Manager, Big4.com
According to PwC’s US retail and consumer M&A insights Q3 2012 report released yesterday, corporations spinning off businesses, private equity (PE) investment in retail, continued cross border activity and expansion into e-commerce drove ret ail & consumer merger & acquisition (M&A) activity in the third quarter of 2012.
Cross border activity represented 30 percent of deal volume and 48 percent of deal value for year-to-date September 2012. Outbound deal activity has been more prevalent, according to the report, particularly investment into Europe, with Asia and South America the other leading areas for U.S. investment abroad this year.
The rise of the digitally empowered consumer is driving retail business models to transition from traditional stores to a marketplace that is increasingly omnichannel. According to PwC, retailers are increasingly looking at acquisition opportunities to more quickly transform their business by expanding their e-commerce capabilities and to gain access to alternative business models.
The retail and consumer sector has also seen continued activity in corporate restructuring and spin-offs, as companies reassess their portfolios and positioning in an increasingly competitive environment. The report states that recent corporate spin-offs have generally focused on realigning businesses to distribution channels or high versus low growth product segments. As companies begin to trade separately, PwC believes there may be increased M&A activity to drive growth in the re-focused business segments.