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McClatchy-Tribune  07/29/2014 3:05 PM ET
Spring a busy period for retail, consumer M&A deals [Chicago Tribune :: ]

July 29--Deal makers were busy in the retail and consumer sector last quarter. Eight multibillion-dollar deals were announced from April through June, up from four such deals in the second quarter of 2013 and five deals of that size announced in the first quarter of 2014, according to data just released by PwC.

Arkansas-based Tyson's planned acquisition of Chicago-based Hillshire Brands was the biggest deal announced in the space during the second quarter of 2014.

Meanwhile, the number of initial public offerings in the sector also soared. The second quarter of 2014 was the sector's second strongest quarter of IPOs in three years, measured both by the number of deals and the proceeds generated from them, according to PwC.

Thirteen offerings priced with total proceeds of $4.9 billion, PwC said. Chicago-based GrubHub's IPO was one of the offerings during the quarter.

PwC said it expects companies will remain pressured to find growth, which should lead to strong deal activity for the remainder of the year. Consumer sentiment rose during the quarter, yet the three-month moving average remained below levels seen during the summer of 2013, PwC noted, citing data from the Thomson Reuters/University of Michigan Consumer Sentiment Index.

Chicago-area companies were involved in the two biggest retail and consumer deals announced during the second quarter. Also, Sears Holdings completed its spinoff of the Lands' End business early in the quarter.

Here is a list of eight deals announced with values of $1 billion or more, including figures provided by PwC.

1. Tyson Foods/Hillshire Brands -- Tyson beat out rival Pilgrim's Pride in a bidding war for Chicago-based Hillshire. Tyson is set to pay $63 per share for Hillshire, for a total deal value of about $7.7 billion

2. D.E. Master Blenders/Mondelez International -- European coffee businesses are set to unite and Deerfield-based Mondelez is set to get after-tax proceeds of about $5 billion in cash and retain a 49 percent stake in the new company

3. Mars/Procter & Gamble -- Mars is set to buy P&G pet food brands for $2.9 billion

4. Post Holdings/Michael Foods -- Post paid $2.5 billion for Michael Foods, which it bought from GS Capital Partners LP

5. Mizkan Holdings Co Ltd/Unilever -- Mizkan is set to pay about $2.2 billion for Unilever's North American pasta sauce business, which includes the Bertolli and Ragu brands

6. Golden Gate Capital/Red Lobster -- Golden Gate plans to pay $2.1 billion to buy the Red Lobster chain from Darden Restaurants

7. Energy Transfer Partners/Susser Holdings Corp. -- Energy Transfer plans to buy Susser, which runs convenience stores and gas stations, in a stock swap worth $1.8 billion.

8. American Realty Capital Properties is set to buy most of the Red Lobster restaurant properties for about $1.5 billion in a sale-leaseback transaction that is contingent on the Golden Gate/Red Lobster deal

jwohl@tribune.com

Follow @JessicaWohl Follow @chibreakingbiz

 

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