Major Retailers Turn to Mergers Amidst High Street Struggles
- Retail M&A grows by 15%
- Value of deals drops by 16% to £3.7bn
- 37 deals in the year up to 31 March compared to 31 between 2016-2017
- Companies prefer M&A over flotations for investment
- RPC study shows rise in retailers entering insolvency by 7%
A recent study by law firm RPC reveals that retail mergers and acquisitions have increased by 15% in the past year, with 37 deals completed up to March 31st compared to 31 between 2016-2017. However, the total value of these deals has dropped by 16% from £4.3bn to £3.7bn. RPC corporate partner Karen Hendy explains that market leaders are focusing on expanding their offerings and scale rather than succumbing to high street ‘meltdown hype.’ The study also highlights a 7% increase in retailers entering insolvency, but notes that troubled retailers’ assets remain attractive for cut-price purchases. This shift towards mergers and acquisitions over flotations is seen as a safer investment strategy.
Factuality Level: 8
Factuality Justification: The article provides relevant information about the increase in retail mergers and acquisitions, cites a specific study by law firm RPC, includes quotes from a corporate partner of the firm, and discusses the current market climate. It also mentions the proposed merger between Sainsbury’s and Asda, as well as the rise in insolvencies. However, it could provide more context on the overall retail industry situation and potential reasons for the increase in M&A activity.
Noise Level: 3
Noise Justification: The article provides relevant information about retail mergers and acquisitions, including specific numbers and trends. It also includes insights from the law firm partner Karen Hendy. However, it could benefit from more analysis or context on why companies are choosing M&A over flotations and what this means for the industry.
Financial Relevance: Yes
Financial Markets Impacted: Retail sector
Financial Rating Justification: The article discusses mergers and acquisitions in the retail sector, their growth, and their impact on companies’ investment strategies. It also mentions the increase in insolvencies, which can affect stock prices and market trends.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the article
www.retailsector.co.uk