Among the sectors that have been finding opportunities for growth and expansion in mergers and acquisitions, the retail sector has also stood out with important transactions that took place in recent years.
The economic recovery after the most dense period of the COVID-19 pandemic was one of the drivers of this intensification of M&A operations between companies in this area, especially in food retail. Continue reading the article and learn more about it.
The retail market in recent years.
It is not new that we have been experiencing an atypical period since 2020, when the first cases of coronavirus began to emerge and the impacts were felt around the world, by all segments.
The retail market was one of the hardest hit, especially with the large number of physical stores that could not resist the economic difficulties brought about by this moment — which was marked, mainly by the lockdown and closure of trade — and ended their activities.
However, with the cooling of this pandemic phase, the economy reacted again and rekindled the flame of M&A operations between retailers. This can be proven in data, as collected by KPMG, which shows that 2021 recorded the best performance in the last two decades,with over 5,000 transactions and a 20% increase over the previous year.
One of the highlights of this growth is due to the greater number of mergers and acquisitions in food companies, which can be explained by a transformation in the consumption habits of the population, with most people seeking a better quality of life.
In 2022, the scenario was more cautious and negotiations had a slight retraction of just over 15%, according to KPMG. This does not necessarily mean that there was a shrinkage of the market, but that many organizations underwent a strategic repositioning so that they could adapt to changes and chart new paths.
Despite this period of stabilization, mergers and acquisitions remain a promising alternative in the retail segment, especially in the food sector, which led the transactions that took place both in 2021 and in 2022 —43 and 37, respectively, according to KPMG.
Which retail sectors carried out the most mergers and acquisitions in recent years?
Considering the macroeconomic scenario of M&A transactions that took place between retail companies in Brazil last year, a total of 88 transactions were recorded, slightly below 2021, which accounted for 104.KPMG.
As mentioned in a previous section of the article, the food and beverage sector emerged in the lead, motivated by a greater need for consumption by people and also by the strategic resumption of the expansion project of many businesses after a break forced by the pandemic , especially in large networks.
Following, we have retail stores — with 43 transactions in 2021 and 23 in 2022 — in addition to supermarkets, which had a significant increase between one year and another, totaling 19 transactions compared to the 10 that were previously registered.
Shopping centers — with 5 operations in 2021 and 8 in 2022 — and clothing stores — with 4 transactions added in the two years — had the lowest merger and acquisition rates considering this most recent period.
What are the biggest mergers and acquisitions that have ever occurred in retail?
It is impossible to make a precise calculation of how much the retail market has moved with mergers and acquisitions throughout history, but we can have a sample from the biggest transactions that have occurred recently and have changed the panorama of many companies.
One of the most prominent negotiations took place in 2021 between two of the most important retail groups in the country:the purchase of Grupo Big by Carrefour.The amount that circulated in this acquisition surpassed the millions and reached R$7 billion.
In the same year, theAmerican stores also took an important step in their expansion plans by acquiring all of the operations of theEarth’s Natural Hortifruti, aiming to expand the supply of natural products. The deal was configured for R$ 500 million.
Americanas also carried out another important transaction, when it merged withB2W, with the aim of improving the offer of digital channels for its customers. Another reflection of the advancement of technology and remote activities, brought about by the pandemic.
In the shopping center sector, theAliansce e a brMalls went through an integration that was consolidated in January of this year. According to a report by Valor Econômico, the negotiation yieldeda net profit of more than BRL 2 billion only in the first trimester.
A segment that also carried out some of the most important M&A operations in retail was the pharmaceutical sector. We can cite as an example the purchase of more than 90% ofExtra pharmacy for the Pay Less Network, for an amount greater than R$ 700 million.
The data proves that the opportunities are there and the market is always showing good possibilities for growth from the mergers and acquisitions of companies. Therefore, it is important to have a consultancy such as 3Capital, which includes several successful cases in its portfolio and can help guide this process, from mapping new negotiations to consolidating the transaction.
