Consumer sector ready for M&A spree with a £16bn warchest

Kasmira Jefford
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BRITAIN’S top 30 consumer firms are sitting on a £16bn warchest, according to research out today by Deloitte, raising the curtain for renewed mergers and acquisition (M&A) activity as confidence returns to the sector.

The seven largest listed firms have amassed £13bn alone after rebuilding their balance sheets following the recession and reining back on their spending.

While deal volumes are still low, Deloitte predicts that record cash levels combined with improving consumer confidence, a growing appetite for risk and access to debt will drive an uptick in M&A activity.

A survey of 24 European consumer players found that 80 per cent were “optimistic” about the outlook for M&A activity over the next year compared to just 28 per cent six months ago.

Deloitte partner Conor Cahill said: “A number of companies now have the firepower from their accumulated reserves to continue to expand their presence into high growth markets or consolidate their position in existing markets by acquiring competitors.”