Eighty percent of executives believe that mergers and acquisitions will continue to go up after the lows of the pandemic, according to a report from Kearney. In addition, of the top 20 consumer companies, three quarters are likely to undergo a major divestiture in their portfolio.
“If past crises have taught us anything, it is that a dramatic new wave of change and innovation typically follows tumultuous times like 2020,” said Bahige El-Rayes, Kearney partner in the consumer practice and co-author of the report, in a statement. “Consumer and retail executives are keenly aware that organic growth and innovation alone are often insufficient. The more active 2021 M&A and divestiture market will require leadership and bold imagination to pursue alternative strategies, with an eye toward creating both immediate and longer-term growth opportunities and shifting toward more localized operating models.”
In addition, the report predicts that leaders in this dynamic market will be both buyers and sellers as they prune their portfolios, invest in both growth and optionality, and leverage new deal and integration structures during these times of change.