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The transformation journey will continue for many businesses as they respond to evolving consumer behaviors by reinventing their business models. KPMG's Consumer & Retail M&A trends 2020 report – Pursing opportunities amid uncertainty - reveals how industry players are acquiring core competencies that businesses are missing – such as digital capabilities, analytics, e-commerce, modernized supply chains and new product categories.

Portfolio optimization will again be near the top of the agenda as investors keep growth and capital redeployment sharply in focus amid ever-changing consumer expectations and behaviors. Many sector players are still on a digital transformation journey, a trend that will continue at a robust pace.

However, increasing uncertainty in the global economic and geopolitical environment and weaker global growth prospects (the IMF in January 2020 revised its 2020 global GDP growth forecast to 3.3 percent, a downward revision of 0.1 percent point) will likely prompt investors to tread very carefully while pursuing C&R deals.

This report includes these key observations and insights:

  • The transformation journey is expected to continue in 2020 as global businesses proactively respond to evolving consumer behaviors – reinventing business models to become more customer-centric. We anticipate the focus on portfolio rationalization, consolidation and diversification to continue driving the majority of sector-related M&A in the year ahead.

  • M&A will remain heavily influenced by the ongoing sustainability agenda as investors target assets with sustainability features offering value in the longer run. The frequency of M&A megadeals will be outpaced by tactical deals aimed at helping firms innovate and reshape operations via their acquisition of new capabilities.

  • Overall, we anticipate a healthy level of C&R deal making in 2020 as sector players look to M&A as an important engine for long-term growth in today’s disruptive era. At the same time, it remains to be seen how global economic and geopolitical uncertainty and weaker global growth prospects will impact investor activity this year.

Download the full report for more on these trends.

For more information, download the full report or contact Nicola Longfield, Global C&R Deal Advisory Lead.

Please note that this KPMG publication is being launched amid global uncertainty concerning the potential impact of the novel coronavirus (COVID-19), hence its immediate impact on future M&A remains unclear.

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Consumer & Retail M&A trends 2020: Pursuing opportunities amid uncertainty
KPMG’s 2020 Consumer & Retail M&A trends report predicts that the transformation journey will continue this year as global businesses proactively respond to evolving consumer behaviors – reinventing their business models to become more customer-centric. The focus on portfolio rationalization, consolidation and diversification is expected to continue driving the majority of sector-related M&A activity in the year ahead. In addition, we expect sector players to remain heavily influenced by the ongoing sustainability agenda, as investors target assets with sustainability features offering value in the longer run. The report also outlines our regional outlook and what to expect as key M&A themes in the sector this year.
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