Consumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn

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There was a considerable decline in the number and value of merger and acquisition (M&A) deals announced in the consumer sector since the start of the year.

According to the research data analyzed and published by Stock Apps, there were a total of 2,244 deals announced during the first nine months of 2020. Compared to the 2,922 deals announced during a similar period in 2019, that marked a 23.2% decline YoY.

Consumer M&A Deals From 2019 to 2020

Consumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn Brandspurng
Source: GlobalData

Deal value dropped even more significantly, reaching $138 billion in the same period. That was a 50.3% decline from the $278 billion recorded in the first nine months of 2019.

Goldman Sachs took the lead globally in terms of value, advising on a total of 23 deals valued at a cumulative $21.1 billion. On the other hand, PwC led in terms of transaction volume, advising on 25 deals worth $3.5 billion.

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Morgan Stanley ranked second in terms of deal value, advising on 15 deals worth a total of $20.1 billion. JP Morgan Chase and Citi both advised on 9 deals, worth $17.1 billion and $15.4 billion respectively.

PwC did not make it to the list of top 10 advisers by deal value due to the fact that it was involved in low-value transactions. Of the top ten advisers by deal volume, only three made it to that list.

Besides Goldman Sachs and Morgan Stanley, Evercore was the only other adviser on both lists, involved in 11 deals worth $9.8 billion.

APAC High-Value Deals Reach $392 Billion in Q3 2020, Highest on Record

Overall M&A activity in 2020 declined at a slower pace in the Asia Pacific (APAC) than it did in other major economies.

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During H1 2020, the deal value in the Asia Pacific (APAC) decreased by 17%, compared to 31% in Europe and 72% in the US according to Mergemarkets.

Similarly, in the period between Q1 and Q3 2020, deal volume in the APAC region slumped by 8% YoY according to EY. Comparatively, there was a 20% YoY drop in the US and 15% in Europe.

Notably, too, the rebound was faster in some regions of the APAC more than others. China is a case in point, where deal volume in March and April rose back to 2019 monthly average levels. And for H2 2020, it remained relatively consistent.

Global Data research backs up this claim, showing that in Q3 2020, China topped the region’s M&A deal activity. It had a 29.5% share of total deal volume during the quarter, followed by Japan at 15.9% and India at 15.7%.

Read Also:  Nigeria's public debt rose to N22.4Trn in 6 months

APAC M&A Deal Volume in Q3 2020

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Consumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn Brandspurng1
Source: GlobalData

There was a total of 671 deals in APAC in the month of July, dropping slightly to 663 in August and further down to 616 in September. China took a 30.6% share of the deals in July, dropping to 27.9% in August and in September, rose slightly to 30.2%.

In terms of deal value, China had a 44.2% share during the quarter, followed by Japan at 25.9%. For the month of July, China had a lion’s share of the action, accounting for 78.9% of the $77.2 billion recorded in deal value.

Its share fell to 23.1% of the $48.9 billion received in August and rose to 25.8% in September, from a total of $89.7 billion.

Across APAC, M&A activity has shown resilience during the pandemic period. Some sectors in fact experienced growth during Q1 to Q3 2020. These include telecommunications, which grew by 19% year-over-year (YoY), life sciences at 9% and utilities at 9% as well.

In fact, APAC as a whole saw high-value deals reach $392 billion in Q3 2020, the highest Q3 figure on record. Megadeals ($10 billion or higher) increased the overall deal value in the quarter.

Valuation Multiples Drop from 13.8x to 10.5x from Jan. to Aug. 2020

Global M&A deal activity got off to a slow start in 2020 and the pandemic only served to accelerate the slump. According to Research Gate, April 2020 deal volume was 80% lower than in December 2019.

As of mid-September 2020, there had only been 15 mega deals, compared to 27 during the same period in 2019. None of the mega-deals surpassed $50 billion in value and only 10 were announced after March.

Valuation multiples also decreased considerably, with the median deal multiple at 10.5x during the first eight months of 2020. Comparatively, the same period in 2019 saw a median deal multiple of 13.8x.

Interestingly too, more companies are looking to explore alternative deals (42%) compared to those considering traditional acquisitions (39%). Alternative deals typically involve acquiring minority stakes or striking cooperative agreements (alliances, partnerships and joint ventures).

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Consumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn - Brand SpurConsumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn - Brand Spur

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Consumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn - Brand SpurConsumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn - Brand Spur

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Securing Payments in Asia: Omise Integrates the EMV 3DS 2.2 Protocol Using Netcetera’s 3DS Server

Securing payments in Asia with latest 3-D Secure technology - Omise integrates the EMV(R) 3DS 2.2 protocol using Netcetera's 3DS Server


ZURICH, SWITZERLAND and SINGAPORE - EQS Newswire - 27 January 2021 - 

Securing payments in Asia with latest 3-D Secure technology
Omise integrates the EMV 3DS 2.2 protocol using Netcetera's 3DS Server

The Payment Service Provider Omise has implemented the Netcetera 3-D Secure Server to secure online payment transactions in the APAC region. Netcetera, a market leader for digital payment solutions, offers certified products for 3DS payment processing, and promotes secure and frictionless consumer authentication. With the go-live beginning of January 2021, Omise is among the first PSP customers to implement the latest EMV(R) 3DS 2.2 protocol, enabling them to increase the approval rates and reduce fraud.

PSPs, merchants and acquirers need to reduce the risk for non-authenticated transactions, associated refunds and lost revenue, while at the same time establishing a frictionless flow and improving the cardholder experience during online shopping. Finding the right balance of serving both security and convenience is a challenge.

To successfully address this challenge, Omise decided to implement the network-certified and PCI-ready Netcetera 3-D Secure Server on premise solution. They are among the first PSPs to implement the 3DS server with the latest protocol EMV 3DS 2.2. Jatuporn Pinnuvat, Head of Product Innovation at Omise, says: "After a thorough evaluation and investigation of different suppliers and products, we decided on Netcetera with their flexible, agile and independent payment offering. We consider their 3DS server as the most reliable and viable product to support secure and convenient transactions. The implementation was smooth and efficient, and we were able to save a lot of time and effort thanks to the comprehensive technical documentation, educational webinars and Netcetera's professional support."

With their strong presence, providing service to thousands of merchants in the APAC region, Omise is a major player in the payment industry, and drives security and convenience of online payments together with Netcetera. Kiril Milev, Managing Director of Netcetera's location in Singapore, says: "We are convinced that we can bring value to the payment industry with our certified and state-of-the-art products, driving e-commerce payment forward. With this implementation at Omise, we are able to strengthen our presence in the APAC region". Ivan Ong, responsible for sales and business development in the area for Netcetera, adds: "We are committed to adapt our products to new regulations and protocols and are always among the first to be compliant. We are happy to count Omise among our customers, and as one of the first to implement our server with the latest 3DS 2.2 protocol."

EMV(R) is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC.

About Netcetera

Netcetera is a global software company with cutting-edge IT products and individual digital solutions in the areas of secure digital payment, financial technologies, media, transport, healthcare and insurance. More than 2,000 banks and issuers, and 150,000 merchants rely on the digital payment solutions and globally certified 3-D Secure products of the market leader for payment security. The owner-managed company covers the entire IT lifecycle, from ideation and strategy to implementation and operation. The balanced combination of the latest technologies and proven standards ensures investment security, from large-scale projects to innovative start-ups. Founded in 1996, Netcetera is a holding company with 700 employees and is headquartered in Zurich, Switzerland, with additional locations across Europe, Asia and the Middle East.

Further information:

About Omise

Established in 2013, Omise is a payments platform which provides businesses with a modern end-to-end infrastructure to accept, process and disburse payments online. Working with Omise, merchants have access to powerful payment tools, comprehensive risk management solutions, as well as connection to card networks and consumers' preferred payment methods. Omise enables revenue growth and seamless payment experiences across online, in-store and in-app.

Omise is present in Thailand, Japan and Singapore. The company is the payments platform of choice for thousands of brands today.

Further information:

Consumer Sector Merger and Acquisition Deal Value Declines by 50% YoY to $138 Bn - Brand Spur

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