2017 ushers in spate of mega M&A dealmaking

● Food among most active sectors in flurry of consolidation

0 Tesco is on the march with its successful move on wholesaler Booker Uncertainty around Brexit failed to stifle a string of deals in 2017, with Britain’s competitive supermarket sector at the heart of the fray.

In January, Tesco wrongfooted the industry with a £3.7 billion swoop for food wholesaler Booker. Rival wholesalers claimed it would hand Tesco “incontestable power”, but the Competition and Markets Authority (CMA) approved the deal in December, saying it would not lead to higher prices or hit service for shoppers.

The industry had been given more food for thought in June when online retailer Amazon sealed an all-cash deal worth $13.7bn for Whole Foods – following on from the launch of Amazonfresh and its deal to sell a raft of Morrisons products online.

Meanwhile, the Co-operative Group made a £137.5 million bid for Nisa’s 3,200 stores, which is set for regulatory approval next year.

Jonathan Boyers, KPMG head of corporate finance in the North of England, said the Tesco and Co-op deals signalled a push from the major players to tackle the convenience sector “more effectively”.

He said: “They have all sort of dabbled in developing their own chains of convenience stores, but the independent convenience stores sector has remained independent. Obviously the Tesco-booker deal was a game changer and that forced the Co-op to look at Nisa.”

Standard Life and Aberdeen Asset Management ushered in one of the biggest deals of 2017 in March, inking an £11bn merger to create a combined fund management giant, with annual costsavings of £200m and 800 redundancies.

The Office for National Statistics (ONS) said there were 163 M&A deals involving a UK company between July and September, with a total value of £86.4bn – including US group Mccormick’s $4.2bn takeover of Reckitt Benckiser’s food brands.

Earlier in the year in the home products and food sector, Kraft Heinz made an unsuccessful move for Unilever.

Late in the year, Walt Disney’s $52.4bn deal for Rupert Murdoch’s 21st Century Fox is set to have wider implications for the British media landscape.