Multimillion pound mega-deals may be off the agenda, but mergers & acquisitions (M&A) activity among smaller and mid-sized companies is likely to be as vibrant as ever in 2008, according to delegates at a Food Manufacture business leaders round-table debate.
The event, now in its second year, brought together chief executives and mds, corporate finance specialists and legal experts to discuss the future of UK food manufacturing.
While the credit crunch had cut the amount of cash private equity giants had at their disposal, food companies were still regarded as good investment opportunities, said Hg Capital associate director Sophie Albizua. "Large deals will be more difficult in the short term, but there are opportunities in mid-sized to small deals."
Although the UK economy was entering an economic slowdown, a recession was unlikely, predicted Trevor Williams, chief economist at Lloyds TSB Corporate Markets.
A large part of the discussion focused on the health debate and the political and regulatory pressures facing manufacturers in the firing line as obesity figures spiralled out of control. Most felt they were being unfairly targeted by "well-financed and well-mobilised NGOs" who had turned their attention to the food industry after seeing off big tobacco. But there were a few dissenters. Pasta King director Paul Haigney said: "As an industry, we do make, sell and promote some rubbish - we can't be holier than thou about all this."
Food manufacturers that had made great strides to improve the nutritional quality of their products should not take flak from the media and the government sitting down, said Eversheds partner Owen Warnock. "The amount of regulation we have to put up with is astonishing. It's time to fight back!"
l For a full report on the debate, see next month's issue of Food Manufacture.