Top takeaways
- Europe’s consumer M&A market is resilient, but increasingly selective
- Strategic fit and pricing discipline are now central to execution
- Portfolio simplification is creating opportunities
- Assets with durable consumer demand are attracting capital
- Execution risk remains high
M&A dealmaking within Europe’s consumer sector has grown steadily in recent years, delivering a record volume of deals in 2025. Value has also been on the rise, with 2025 posting a four-year high.
Despite considerable geopolitical and macroeconomic challenges, 2026 has already outstripped last year’s total, with deal value at the time of writing (September 29) already hitting US$99.9 billion. Meanwhile, volume has remained relatively stable, with 1,336 deals announced so far.
Variety, diversity and strategy drive deals
The variety and diversity of deals have been fundamental to the resilience of the consumer M&A market across Europe. Transactions have changed hands across a range of subsectors and geographies, with large transactions characterizing the market. Dealmakers have shown a focus on seeking the right strategic fit at the right price.
The largest transaction of the year saw Unilever combine its food business with US food giant McCormick in a deal valued at US$42.7 billion. The landmark merger will create a global flavor powerhouse that includes iconic household brands such as McCormick, Knorr and Hellmann’s. Strategically, Unilever notes that the deal will simplify its portfolio, allowing the company to concentrate on its core products.
The second largest deal of the year saw Canadian multinational Alimentation Couche-Tard announce its intention to purchase Polish convenience chain Zabka. The US$8.7 billion deal, expected to close in December, will substantially increase the retailer’s presence in the CEE region. Alimentation Couche-Tard said in July that the combined group would operate roughly 30,300 stores, raising Europe to about 60 percent of the combined store base, from 30 percent, and increasing diversification away from fuel.
Another transaction targeting a well-known household name was Tate & Lyle’s takeover by US rival Ingredion. The UK-listed food ingredients supplier recently switched its focus to producing artificial sweeteners and specialty food ingredients.
International PE firms are also currently active in Europe’s consumer space. US giant KKR is reportedly exploring the sale of Dutch spreads business Flora Food Group at a targeted valuation of US$10 billion. CVC, meanwhile, acquired Italian specialty ingredients producer IRCA for US$3.4 billion. The global PE player reportedly beat competition from leading rivals such as Cinven and PAI Partners to secure the deal.
A bright future for big brands
The top deals of the year so far display the breadth of Europe’s consumer market. Deals have been spread across a wide range of subsectors, along with a variety of geographies. This depth within the market will continue to drive deals over the next 12 to18 months.
Looking ahead, dealmakers will continue to favor targeted and strategic purchases over opportunistic buys. Wider geopolitical uncertainties are creating a choppiness within the market, and dealmakers are focusing on getting the right pricing mechanisms in place. Minority stake acquisitions, earn-outs and deferred consideration structures will be popular as dealmakers look to get the pricing element right.
The right ingredients
One key area of focus for dealmakers is the food ingredients space, which is receiving renewed focus from dealmakers this year. As food ingredients divisions have underperformed relative to their core businesses, the strategic case for carve-outs has become more compelling. Unilever’s divestment of its food arm is an example of a company shedding non-core assets in order to realize value. PE firms are likely to become more active in the subsector as this trend continues.
Health and wellness is another enticing subsector. Consumers are increasingly conscious of their dietary intake: A recent report from McKinsey noted that the global wellness industry is now worth around US$2 trillion and being driven by younger consumers from the Millennial and Gen-Z demographics. Food and beverage businesses able to tap into the current healthy-lifestyle trends and the perceived dangers of ultra-processed foods will continue to be popular deal targets. One such example is Danone’s US$1.2 billion acquisition of UK meal supplement maker Huel, with others likely to follow.
Europe’s thriving e-commerce sector could also continue to be a major catalyst for deals. Uber's acquisition of Delivery Hero, for example, was driven by the need to remain competitive in an increasingly consolidated industry.
This need to rationalize geographic footprint and ensure sufficient market penetration is set to drive higher-value deal activity within the sector.
AI and M&A
In the past two years, AI has been the primary catalyst for M&A across most industries and could become a definitive driver of deals within the European consumer sector. Businesses are increasingly embedding AI into their internal systems to drive efficiencies and reduce costs. This is particularly the case within the traditional end of the market, including food & beverage companies. Many of these businesses are still in the build phase, but those able to effectively optimize AI will become increasingly attractive deal targets.
Challenges on the horizon
Europe’s buoyant consumer M&A market is not without challenges. Geopolitical uncertainty and supply chain disruption will arguably be the greatest obstacles facing dealmakers over the next 12 to 18 months. An unsettled macroeconomic environment is making it difficult to price deals, which is complicating the route to completion. Meanwhile, financing costs are still high and consumer confidence low—currently standing at minus 15 points in the EU, well below the long-term average across the Continent—which could give dealmakers pause for thought.
While 2026 has recorded strong M&A value, this does not reflect a market-wide recovery. Dealmakers have tended to focus on strategic, high-value deals, meaning that top-line activity is on the rise but volume is not increasing at the same rate. This bifurcation is resulting in a section of mid-market and lesser-known consumer businesses being stuck in a standoff between sellers and buyers.
Difficulty pricing deals and pervasive market uncertainty are also affecting the exit market, with PE firms finding it increasingly challenging to achieve sales at an attractive price. This dynamic is causing firms to hold on to assets for longer, creating a stagnant deal market. Recent Pitchbook research shows that median hold periods in the consumer sector rose from six years in 2015 to just over seven in 2025.
Increasingly sophisticated regulation is another area that dealmakers will need to consider. The European Commission is increasing its focus on mandatory allergen labeling on foods, and proposed regulatory changes will impact a range of subsectors involved in the production, processing, distribution and sale of food products.
Cutting through the noise
Despite these ongoing market challenges, opportunities will emerge for buyers with focus and conviction. Those with a clear strategy and expectations on pricing will continue to seek out assets at the right price and in a well-planned manner. These types of deals will be favored over opportunistic purchases as dealmakers navigate an uncertain market.
This dynamic will continue to fuel a divide in the market in which premium, in-demand assets demand a competitive price, while the mid-market remains quiet. Dealmaking will continue to home in on a relatively small number of large, high-conviction transactions until a full market recovery materializes.
