White & Case: Shifting buying habits fuel consumer acquisition spree in 2017

White & Case: Shifting buying habits fuel consumer acquisition spree in 2017

Image: 
Chamber Member News Post Date: 01/25/18 Source: White & Case By: William Choe and Arlene Hahn
Intro Links: 
Summary

A fundamental shift in buying habits is driving M&A activity in the consumer sector. In reaction to a growing “on-demand” culture—where customers are expecting products and services delivered instantly—firms are using M&A as a strategy to rethink business models.

The global consumer sector saw a rebound in activity during 2017. A total of US$380.85 billion spent across 2,090 deals marked the second-highest annual deal value since the financial crisis.

Three trends are helping to drive the recent growth:

1. On-demand culture pushes retailers online:

Due to the pressure being exerted by online marketplaces, traditional retailers are feeling the squeeze. In the US alone, national chains closed a record 8,000+ stores in 2017, including JCPenney, Macy’s and Sears stores. The sharp rise in online sales has pushed traditional retailers to buy into this space. PetSmart’s US$3.3 billion takeover of online pet retailer Chewy.com is one such example of this trend. Read Full Article