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PwC: 11 Retail Mega Deals Topped $1B in Q3 2015

Third-quarter merger and acquisition activity was up from the previous period but still below last year’s levels, according to new data.

PwC’s quarterly U.S. retail and consumer deals insight report revealed that the three months ended Sept. 30 experienced the most “mega deals” of the year, with 11 valued in excess of $1 billion across several sub-sectors, including e-commerce and specialty retail, but dominated by agribusiness.

By comparison, only four such deals closed in the second quarter of the year.

Private equity firm Sycamore Partners agreed to merge with department store chain Belk, based in Charlotte, North Carolina, for $2.7 billion. Elsewhere, Liberty Interactive, the parent company of home-shopping service QVC, announced in August that it had agreed to acquire struggling Seattle-based flash-sale site Zulily for $2.4 billion.

“There are several consumer trends that are influencing deals, including shifting food and beverage preferences, a growing demand for healthcare and luxury goods and uncertain global economic conditions,” PwC said.

Overall, 36 deals valued at more than $50 million were announced during the third quarter, a 6 percent increase from Q2, but a 36 percent drop from the year-ago period. According to PwC, quarterly volume has averaged 43 deals since Q4 of 2013.

In addition, private equity participation has slowed. The volume of private equity deals as a percentage of the whole dropped from 29 percent in the second quarter to 17 percent and from 23 percent for the same period a year prior.

With that being said, PwC’s report indicated that the positive momentum seen in Q3 versus prior quarters is likely to continue through the remainder of the year. Shareholder activism, cross-border activity and companies seeking to acquire access to digital and omnichannel capabilities will be key factors driving the deals market.